Social commerce has revolutionised the way we shop, but it has also become a haven for fraudsters. Fake reviews, counterfeit products, payment fraud, influencer fraud, and phishing scams are just some of the ways that fraudsters exploit the vulnerabilities of social commerce platforms to deceive users and extract money from them.
Fake reviews are particularly prevalent in social commerce, with fraudsters paying people to write positive reviews for their products or services, regardless of whether they have actually used them. According to a survey by BrightLocal, 95% of consumers suspect fake or censored reviews when they encounter them. This makes fake reviews a serious threat to the credibility of social commerce platforms.
Counterfeit products are another significant issue in social commerce. According to the Organization for Economic Co-operation and Development (OECD), counterfeit trade accounts for 3.3% of global trade, with a value of $509 billion. Fraudsters create fake versions of popular products and sell them at a lower price, often using the same branding and packaging as the original. In some cases, these products may be dangerous, such as counterfeit cosmetics or electrical goods.
Payment fraud is also a significant issue in social commerce, with fraudsters tricking users into paying for goods or services that they never receive. According to the Federal Trade Commission (FTC), there were over 2.2 million reports of fraud in 2020, with losses totaling $3.3 billion. Fraudsters may take advantage of vulnerabilities in the payment system to steal credit card information or trick users into entering their payment details on a fake website.
Influencer fraud is another common form of fraud in social commerce. Fraudsters pay influencers to promote their products or services to their followers, but without disclosing the payment. This violates the rules of social media platforms and can mislead users into thinking that the influencer genuinely endorses the product. According to a survey by influencer marketing agency Mediakix, influencer fraud is estimated to cost brands up to $1.3 billion per year.
Finally, phishing scams are a major threat to social commerce users. Phishing scams involve fraudsters sending emails or messages that appear to be from a legitimate source, such as a social commerce platform or a bank, in order to obtain personal information or payment details. According to a report by the Anti-Phishing Working Group, there were over 222,000 reported phishing attacks in the first quarter of 2021 alone.
In conclusion, fraud has been common within social commerce, and it is essential to be vigilant when shopping online. By staying informed and taking appropriate precautions, such as checking reviews, verifying the authenticity of products, and avoiding suspicious websites, we can help to protect ourselves and our online transactions.