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Shoppers swindled after buying ‘phantom goods’

30 June 2017

More and more people are being caught out by ‘phantom goods’ scams costing them an average of £1,100, Citizens Advice says.

Shoppers are conned into buying high value items like cars and flights, namely online, which turn out not to exist.

New figures reveal a 17% increase in people reporting ‘phantom goods’ to the Citizens Advice consumer service.

People were also more likely to lose money from ‘phantom goods’ than any other scam - ranging from fake doorstep sales to investment scams - with 96% losing money compared to 55% across all scam types.

The findings are being released ahead of Scams Awareness Month which starts on Saturday 1 July. The campaign is led by Citizens Advice and Trading Standards and encourages people to report and talk about scams.

‘Phantom goods’ scams involve fraudsters advertising items at cut prices on social media sites like Facebook and Instagram, and online marketplaces such as Gumtree and Ebay. Scammers will also post fake customer reviews to give the impression they are a reputable trader.

Fraudsters pretended to sell a range of goods, from jewellery and cameras to musical instruments and driving lessons. The most common items for people to get scammed on were cars, flights and furniture.

One young man paid £2000 for car insurance he found on Instagram, with a seller who had comments of recommendation from other users. He was told the paperwork would be emailed after he transferred the money, but realised it was a scam when the email never arrived. It can be hard to get your money back when you pay with a bank transfer, but his bank was eventually able to claw back the money from the scammer’s account.

Another woman spotted a houseboat for sale on ebay. She exchanged emails with the seller and agreed to purchase the boat for £5000. She was then sent a link to a fake PayPal site to make the payment. She has been unable to get her money back.

The research is analysis of over 3,600 scams logged by the Citizens Advice consumer service between January and March 2017, compared with scams reported during the same time period in 2016.

555 cases of ‘phantom goods’ were recorded between January and March this year, compared to 475 cases over the same period in 2016 - a rise of 17%.

Gillian Guy, Chief Executive of Citizens Advice, said:

“Scams can have a lasting financial and emotional impact on people’s lives.

“With so many people shopping online to compare deals, scammers are using numerous tactics to target people with phantom goods. They are drawing people in with cut-price deals and then persuading people to buy items with phoney recommendations from customers.

“It’s really important that people don’t rush into buying an item when they spot a bargain, but take some time to make sure it’s genuine first.

“Reporting scams also helps the authorities to take action against fraudsters and allows people to get advice on ways to try and get their money back.”

Margot James, Consumer Minister, said:

“Scams like these can be devastating for those affected.

“That’s why this government has been cracking down on these practices to make the internet a safe space for users.Last year National Trading Standards identified and suspended over 500 Twitter accounts and 140 websites linked to scams, leading to hundreds of arrests.”

“I’m encouraged by Citizens Advice’s continued efforts to raise awareness and protect consumers against this kind of crime.”

Lord Toby Harris, Chair of National Trading Standards, said:

“I would always urge people to be vigilant when buying products online. The web and social media platforms have created a new risk for consumers, as National Trading Standards identified in our last Consumer Harm Report . Criminals are able to set up multiple accounts to sell fake or non-existent products from almost anywhere in the world, concealing their real identity and contact details.

“There are a number of steps people can take to protect themselves, including conducting basic due diligence before buying goods. This includes checking reviews or references of the seller and also looking for signs such as whether the website domain begins with ‘https’.

“National Trading Standards is committed to protecting consumers and as such we are taking action to tackle criminal activity online. Enforcement activity led by our eCrime Team has resulted in both criminal websites and social media accounts being taken down. I also want to send a message directly to the criminals behind these scams: we will not hesitate to prosecute you and bring you to justice.”

Leon Livermore, Chartered Trading Standards Institute Chief Executive, said:

"Reporting scams and warning friends is the best way to help trading standards win the battle against uncaring, victimising scammers.'

Getting advice and report scams:

  • Get advice on an offer you’ve had, or find out how you can get your money back if you’ve been scammed, from the Citizens Advice consumer service: 03454 04 05 06

  • Report scams or suspected scams to Action Fraud: 0300 123 2040 www.actionfraud.police.uk

Top tips to avoid buying phantom goods:

  • Research the trader - Don’t rush into buying an item as soon as you spot a good deal. Take some time to do some research on the company or trader first by checking their protected by a trade body or they have registered address.

  • Do a domain check - Type in the trader’s web address to whois.com so you know they’re genuine. Make sure their full address and contact details are listed.

  • Look for the padlock - When buying online, look out for the padlock sign in the url bar on the payment page so you know the website is secure. The web address should also start with ‘https://’ and part of the wording may turn green too.

  • Don’t pay by bank transfer - Always use a credit card, debit card or PayPal to pay for items bought online and never pay by bank transfer. Bank transfers can be difficult to trace meaning you are very unlikely to get your money back.

When buying particular products:

  • Financial products - Make sure the company is on the Financial Conduct Authority’s register of approved businesses.

  • Package holidays -  Check the tour operator is ATOL protected.

  • Used cars - Always have a look at the vehicle and paperwork in person first.

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Notes to editors

  1. The Citizens Advice service comprises a network of local Citizens Advice, all of which are independent charities, the Citizens Advice consumer service and national charity Citizens Advice. Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more see the Citizens Advice website.
  2. The advice provided by the Citizens Advice service is free, independent, confidential and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality.
  3. To get advice online or find your local Citizens Advice in England and Wales, visit citizensadvice.org.uk
  4. You can get consumer advice from the Citizens Advice consumer service on 03454 04 05 06 or 03454 04 05 05 for Welsh language speakers.
  5. Local Citizens Advice in England and Wales advised 2.5 million clients on 6.2 million problems in 2014/15. For full service statistics see our publication Advice trends.
  6. Citizens Advice service staff are supported by more than 21,000 trained volunteers, working at over 2,500 service outlets across England and Wales.