June 15, 2024

With Black Friday and the holiday shopping season just around the corner, the danger of online scams is increasing, reflected by an alarming 22% spike in consumer scam losses during the 2022 Black Friday and Cyber Monday sales. Insikt Group from Recorded Future has conducted a thorough analysis of current high-profile scam website campaigns, exposing three principal strategies scammers use and providing valuable guidance for users and companies to safeguard themselves.

The Peril of Online Shopping Scams

Online shopping scams present substantial monetary fraud threats, with estimated US losses between $8.8 billion and $10.3 billion in 2022 alone. These fraudulent schemes noticeably hit consumers but also, pose challenges for financial institutions, payment processors, and online retailers by undermining consumer confidence and potentially damaging brand image. Remarkably, a 2023 study discovered that 19% of shoppers deserted their carts due to worries about the payment card data security on websites.

3 Key Scam Themes

Unveiling Scammers’ Tricks

The Insikt Group’s inspection of scam website campaigns uncovers three essential techniques that scammers employ in setting up and running deceitful websites, the reasons behind such tactics, and what these trends implicate for victims and businesses (Source: Recorded Future).

For fraudsters, the success of scam website campaigns hinges on social engineering and volume, making proper identification, comprehensive analyses, and heightened customer awareness integral to prevention efforts. Business entities are urged to leverage customer feedback to unmask scams in their early stages. Clearly, mitigation methods can inflate operational expenses, so adopting a customized approach is endorsed. Heightening customer awareness is perceived as beneficial for all businesses, with minimal surges in communication management costs. On the flip side, considerable commitments to defuse scam campaigns and examine them are likely to be most advantageous to financial institutions, leading digital retailers, and firms within the e-commerce and payment domains.

Looking Forward to Black Friday – Scams Amplified by AI

Advancements in generative artificial intelligence (AI) technology are expected to intensify fraud website threats by allowing scammers to rapidly produce content and lure advertisements. As bargain-seeking shoppers gear up for Black Friday, scammers are primed to exploit these favorable circumstances using deceitful e-commerce sites and phishing platforms. Scammers favor generic methods and freely accessible tools for scaling their operations—patterns that businesses could potentially detect. Despite their reliance on open-source tools, fraudsters also deploy complex techniques to circulate scams, drain victims’ credit card accounts and crypto wallets, and pilfer personal data. A refined understanding of consumer behavior remains an essential tool for scammers, aiding them to maximize their fraudulent campaigns’ impact.

To access the full analysis, you can download the report here as a PDF file.