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Online marketplaces fight scams as fraudsters exploit COVID-19

Sibahle Malinga
By Sibahle Malinga, ITWeb senior news journalist.
Johannesburg, 10 Jul 2020

SA’s online marketplaces have intensified their security controls, as fraudsters exploit the growing e-commerce opportunity presented by the coronavirus (COVID-19).

As the pandemic drives an uptick in SA’s online shopping trends, cyber fraud is also witnessing an unprecedented rise.

SA's current economic climate has seen many consumers purchasing second-hand goods versus new, resulting in online marketplaces for classified adverts becoming a breeding ground for scammers.

In addition, the pandemic has given rise to new trends of fake adverts for bulk personal protective equipment (PPE) such as gloves, masks, protective suits and an array of COVID-19 “cures and treatments”.

According to TransUnion, one in four South Africans has been targeted through various COVID-19 online scams.

Local online marketplaces Gumtree, OLX and BidorBuy say as more third-party sellers take to their platforms to sell goods during the lockdown period, they have adjusted their fraud policies, and beefed up security, to detect any suspicious activity on their Web sites.

The two key tactics used by criminals on marketplaces are: For buyers – scammers pose as genuine sellers and post fake advertisements; for sellers – scammers pose as genuine buyers and make fake financial transfers before collecting goods.

In most instances, the payment agreements are between the buyer and seller, with the online marketplace acting only as the middleman.

Nikki Depene-Sander, marketing manager at OLX SA, says fighting fraud is the marketplace’s top priority and it is always seeking new ways to improve safety.

“Fraudulent activity has definitely been on the rise during the COVID-19 pandemic. Fake PPEs, such as bulk sanitisers and other protective gear claiming to prevent the virus, have been used to lure innocent buyers,” notes Depene-Sander.

OLX has for a while been using various crime-detection technologies such as smart algorithms used to screen and trigger fraudulent profiles and suspicious behaviour and strict verification processes.

In addition to its regular content quality team, OLX has a dedicated trust and safety team, which is in charge of moderating adverts in high-risk categories before they are listed on the platform.

verification service on OLX enables users who are not 100% sure about the authenticity of a buyer/seller to send an e-mail with the advert link or a screenshot, for verification by its investigation team.

“It has been necessary for us to adapt our safety measures to ensure we minimise crime on our Web site. Listing products for prices which are way below market value in certain categories such as vehicles and electronics is typical fraudulent activity on our platform. Buyer scams are also a common occurrence and include buyers using fake proof of payments when transacting with sellers,” adds Depene-Sander.

In some instances, scammers use a third-party driver service or a courier to collect the item, and in other cases, the seller will even courier the product to the buyer after receiving a counterfeit proof of payment, she continues.

Estelle Nagel, marketing manager at Gumtree.
Estelle Nagel, marketing manager at Gumtree.

Desperate for quick cash

Estelle Nagel, marketing manager at Gumtree, says while the scams encountered on social media and classifieds are typically not very technologically sophisticated, the company is using advanced tech imported from UK called Threatmetrix. It prevents suspicious adverts from going live on the site.

The classifieds marketplace has had to introduce new policies and run safety and awareness initiatives in the wake of COVID-19-related scams.

“A few new COVID-19-related scams have cropped up; eg, fake bulk sales of protective gear or false medical claims. We’ve updated our keywords on our search tools and introduced new policies to protect our customers not only from fraud but also to safeguard their general safety.

“However, as the economic fall-out from COVID-19 intensifies, customers become more desperate for quick cash – and that is usually when they become more vulnerable. The most common scam is a buyer scam, whereby someone poses as a buyer of an expensive item and claims they are not based in SA.”

Gumtree has also recently eradicated a huge number of job scams on its platform, which requests users to SMS the word “job” to enquire about a job opportunity, or requests applicants to pay a fee in order to apply for a job, notesNagel.

On its Web site, Gumtree advises users on precautionary measures to take to avoid being scammed.

“Our best defence is education and we regularly send e-mails, update our blog and knowledgebase and send press releases to media to combat crime. SAPS has also been extremely helpful in assisting us,” according to Nagel.

This week, Amazon announced a new policy requiring third-party sellers on its marketplace to publicly display their names and addresses as of 1 September 2020. In a notice to sellers, the e-commerce giant states the move is aimed at helping customers learn more about sellers’ businesses and the products they sell.

“We are making this change to ensure there is a consistent baseline of seller information to help customers make informed shopping decisions. We will display a seller’s business name and address on their Seller Profile page. For individuals [customers], we will display the individual name and address. This is consistent with Seller Profile pages across Amazon stores in Europe, Japan and Mexico,” states the notice.

Auction-format sales site Bidorbuy says although the vast majority of transactions are trouble-free, in the unlikely event of fraud, the Bidorbuy Buyer Protection Programme provides additional measures of safety to its community. The site, which has over two million shoppers, says it has been overwhelmed by the increased growth of online shoppers during the lockdown period.

“At Bidorbuy, we believe our users should transact in an absolutely safe, secure and transparent environment. We have put in place processes such as community watch links to ensure users trade with complete peace of mind,” says Anne-Marie Green, marketing manager for Bidorbuy.

“Any attempted scams are picked up by our security team, and as a result, we haven’t seen an increase in scams during the COVID-19 period. It’s been business as usual but with much higher demand from customers.”

Bidorbuy facilitates payments on behalf of sellers, making it safer to confirm payment has been received.

On its Web site, Bidorbuy urges users to be aware of a car scam that recently surfaced in the Bidorbuy car classifieds section: “The seller lists a high-value vehicle at an unbelievably low price. When a prospective buyer makes contact, he or she receives an e-mail message purporting to be from Bidorbuy. The seller requires the payment for this item to be done through Western Union money transfer, promises delivery within three days andthe message ends with the call to the prospective buyer to engage in a live chat with a Bidorbuy representative,” states the warning.