Data protection in online shops: Beware of fake online stores!

The bargain you were hoping for ended up being very expensive—not only was the money lost and the goods never delivered, but the personal data entered during the checkout process was later used by unknown parties for further fraud. The damage was caused by an online fake shop, which offered branded electronics at low prices—and disappeared shortly thereafter. Unfortunately, it can happen to anyone, because despite all precautions when shopping online —online fake shops are looking increasingly professional. Even though a Bitkom survey shows that 75% of male and 69% of female online shoppers believe they can spot fake shops on the internet, the annual total damage estimated by experts caused by online fake shopsin Germany alone tells a different story: 50 million euros.     

Data protection in online shops

Data protection is extremely important for online shops. GDPR, secure website encryption, certified payment methods, and various quality seals are intended to protect customers' personal data and payment information. This is exactly what fraudsters and operators of internet fake shops are after. While these fake shops used to focus primarily on money, they are now increasingly focusing on the theft of personal data and payment information such as credit card numbers. Such data can be sold for profit or used for further fraudulent activities.

Spotting online fake shops

So, what can you do as a consumer? There are numerous points you can check in an online shop before making a purchase to identify a potential fake shop. Of course, one of these factors is not always enough to identify an online shop as a suspected fake shop, but each of these points can be a warning sign. If several of these points occur, you should be suspicious.

• URL: First, take a close look at the domain. Aside from shady URLs that should set off alarm bells right away (such as adidas-shoes-discount.com), it is worth comparing the URL with the goods on offer. Are you on an online shop that offers branded goods, but the domain belongs to a non-profit organization? In cases like these, you should be cautious. Fraudsters often use expired domains that already have good search engine visibility to then open a fake shop under that name. The rule of thumb here is: if the URL is suspicious or does not match the actual business purpose, you should exercise caution.
• Legal Notice: Another indicator of a fake shop can be the legal notice. This is mandatory for every online shop (Section 5 of the German Telemedia Act (TMG) or Section 55 of the Interstate Broadcasting Treaty (RStV)). If the shop has no legal notice or one that is highly incomplete—for example, missing contact details for a specific person—you should be on high alert. You can also perform a contact details check via a domain lookup at Denic, a cooperative with approximately 300 members responsible for the registration and administration of all .de domains. If the URL you check there reveals, for example, that the website is registered to a "John Doe" living at an obviously fake address, you can be fairly certain it is a scam.
• Privacy Policy: Taking a look at the privacy policy can also be revealing. If one is missing, written in broken English, or riddled with errors, you should exercise caution here as well.
• Language: Are the product descriptions or other texts on the website in very poor German, do they seem to have been automatically translated by an online tool, or do they simply not match the product at all? In these cases, you should also be skeptical.
• Price Level: If a bargain seems too good to be true, it usually is. If you have your eye on a specific smartphone and it costs €500 less in the online shop you are currently visiting than the manufacturer's recommended retail price, you should be suspicious. It is also worth comparing it with other online shops to see if the price level of the products offered here differs significantly.
• Certification: There are now many certifications for online shops, such as the Trusted Shop logo. While these logos are increasingly being forged by scammers, clicking on one should always lead you to the certification body's website.
• Payment methods: Sometimes, as a consumer, you might only get suspicious at checkout: is the only available payment method an advance bank transfer? This is usually a red flag. Direct money transfers via Western Union or MoneyGram are also not certified payment methods with buyer protection and are not offered by reputable online shops. The complete absence of a payment method and a request via email to pay by advance transfer should also be viewed very critically, as this makes it impossible to track the payment on the platform.
• Customer reviews: Are you looking to buy from an online shop but have become suspicious? Look for customer reviews! In most cases, warnings about scams for well-known shops already exist online. Otherwise, it is also advisable to search for "Shop XY problems."
• Fake shop list: Finally, there are very comprehensive lists of fake shops, such as the one maintained by the Austrian company "Watchlist Internet." Here several thousand online fake shops are listed, which you as a buyer should avoid at all costs.

First aid for fraud

Despite all caution, it can happen that you become a victim of a fake online shop. Most victims remain silent out of shame – but according to a mid-2018 report by the "Marktwächter Digitale Welt," a consumer initiative of the German federal government, already more than four million Germans have become victims of fake shops . So, what should you do if something has happened? The main thing is that you Take action and do not keep the incident quiet. For example, you can:

• Contact your bankso they can attempt to reverse the payment you have already made.
• File a police report. You should do this even if you haven't suffered a financial loss, for instance, if you have discovered an obvious fake shop. Fraud is a criminal offense, even if it is "only" attempted fraud. Online fake shops fall under cybercrime, which must be taken very seriously. The police provide detailed information on this.
• Keep an eye on your email inbox: Especially if you have "only" lost personal data, it is quite likely that this information will be resold. Email addresses, in particular, are frequently used for phishing emails in the period that follows.
• fake shops the Report to brand manufacturers, as they often have a strong interest in shutting down such shops. Furthermore, major brands have the financial and legal resources to put a stop to the misuse of their brand name.
• Speak up! Staying silent out of shame is the wrong approach – by doing so, you are tolerating the continuation of these criminal activities. Talk to friends and acquaintances about it – this way, you warn those around you while raising awareness at the same time.
• Report the fake online shop to the fake shop list, so that other internet users can be warned as well. Alternatively, a fake online shop can also be reported to the Digital Market Watchdog or to your local consumer advice center.

Author: Kathrin Strauß
Article published on: December 9, 2019