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Lloyds Bank (LLOY.L) has said that tens of thousands of credit and debit card customers have fallen victim to “fake website” scams in the last year alone, losing £55 on average.
The bank warned of a rise in rogue retailers that have been using fake websites to trick people into buying items that never arrive.
Lloyds estimated that these scams had so far cost victims £6.6m, based on the amount its own customers had lost, which it then extrapolated to gauge the total cost to consumers more broadly.
These scams had driven a 211% jump in card payment disputes over the last 12 months, the bank said.
It warned that rogue retailers were using social media to advertise fake websites that mimicked popular brands.
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For example, Lloyds alleged that a company called SM Wallet had created fake websites that imitated brands such as House of Fraser, Office and Superdrug among others, and then promoted significant discounts on social media to lure consumers into buying products.
The bank said other culprits of these fake website scams included Fines Jewellery, Honest Concept Trading Hong Kong HKG, Ziniaofotec and Jimacy.
Those who have bought items from fake websites are typically not sent the products they ordered, or are sent something worth less than what they thought they were purchasing, Lloyds said, referring to the example of one of its customers who thought they had ordered Dior perfume but instead received a ring for a child.
Lloyds Bank also warned that many consumers could be missing out on getting their money back, as fewer than 30% of those who bought items from known scam websites had contacted their bank to dispute the charges.
Gavin Evans, senior manager for consumer cards at Lloyds Bank, said: “When we spot a bargain online, it can be tempting to snap it up, but it’s important to remain vigilant and know that rogue retailers use social media to promote significant discounts on goods they have no intention of delivering.”
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“Remember the old adage — if something appears too good to be true, it usually is,” he added.
Evans said it was also important that consumers check that the web address they are planning to purchase from is familiar and matches the brand they are trying to buy an item from, particularly when opening a website by clicking through from an advert or social media post.
“If you don’t recognise the web address, apply extra caution by checking online reviews of the website and consider buying from somewhere you trust instead,” he said.
Lisa Webb, consumer law expert at consumer group Which?, also suggests double checking the website address. “Domains that end in .net or .org are rarely used for online shopping so you may want to treat them with a healthy dose of scepticism,” she said.
“Think about whether what you are being offered is too good to be true. If prices are suspiciously low and you are being pressured by a countdown timer that should raise alarm bells.”
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For those that do fall victim to a fake website scam, Evans suggests to first try contacting the retailer to explain what has happened and to ask for a refund.
If the retailer doesn’t respond or refuses to provide a refund, he advises consumers to report the transaction to their bank. He pointed out that most banks will allow customers to report transactions online via a mobile banking app and the bank will then typically raise a chargeback claim to aim to recover the money.
To help the bank file a chargeback claim, Evans said that customers will need to provide details of the transaction, including the retailer’s name, the date of the purchase and the amount paid, as well as description of what went wrong with the order.
If a chargeback claim doesn’t work, he said that those that made the purchase on their credit card may be able to make a Section 75 claim. He added that a bank can help with guiding through what needs to be done to raise this claim.
Section 75 of the Consumer Credit Act 1974 offers protection for credit card purchases. It means that credit card companies and sellers are jointly responsible if something is wrong with a purchase.
However, there are cases where this protection doesn’t apply. For example, the item disputed must have cost more than £100 but less than £30,000 to be eligible.
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