How To Scam Millions With Facebook Ads, Shopify Stores, And Fake Products

It’s been a little challenging to get fitness equipment lately, hasn’t it?
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Scammers have noticed too.
That’s why there’s been a proliferation of scammy-looking fitness product ads on Facebook lately. I’ve personally seen literally dozens of ads for fake Bowflex products, often from “stores” with unpronounceable names and obscure but extremely similar websites.
“Scammers are taking advantage of Facebook's advertising options to promote anything they can,” says Molly Borman Heymont, a direct-to-consumer retail entrepreneur. “Facebook does not appear to validate the legitimacy of their advertisers' website or products, so it's more of a buyer beware situation.”

So I bought a pair from a store with the unlikely name of “GearsRice.” I fully expected to get scammed, and I was not disappointed.

The price for the Bowflex SelectTech 552 Dumbbells was $89, a fraction of what the adjustable dumbbells retail for. The SelectTech weights’ claim to fame is that they can be configured for as little as five pounds of weight to as much as 52.5 pounds, meaning that you essentially have a whole rack full of weights in one small package.

Small, relatively speaking.

Each dumbbell is roughly the size of a large toaster, and weighs about 55 pounds with the required base. They retail for around $400, which makes an $89 price point appealing. Very appealing, like dropped-off-the-back-of-a-truck appealing. And not only was the hundred-plus-pound package selling for 75% off retail price ... shipping was free. From China.

I knew I was going to get scammed. So of course, I used PayPal.

Good thing, too. I never received an email confirmation of the purchase, and I never received another communication from the seller.

Two months after initiating the purchase, I ended up receiving a refund from PayPal. The seller was labeled as “QINHUANGDAO” in the refund notification, with an email address of [email protected]. The seller didn’t contest the refund, or offer any explanation.

But what I noticed as I explored not just this but multiple other scams was a growing similarity: a Facebook ad, a Shopify store, and an obviously underpriced product of some kind that was clearly, if you took the time to look, likely to be fake.

Experts say this is a repeating pattern.

“The majority of ads are automatically approved and run until they are detected or flagged by multiple members of the Facebook (or Instagram) community,” says Larissa Lowthorp, a tech CEO and former architect of Best Buy's e-commerce platform. “Shopify does have a form available where consumers can report suspected fraudulent stores but it is not easy to find.”

And having the ability to run a store on a platform like Shopify provides a degree of legitimacy that hasn’t always been available, Lowthorp says.

“In the old days, fly-by-night ecommerce stores used to be pretty easy to spot,” she adds. “They had poor design, shoddy features, and questionable product photos. Shopify offers a quick and easy way for legitimate vendors and scammers alike to create beautiful, sophisticated online shopping platforms in a relatively short period of time.”

In a few weeks, I found a number of very similar ad and storefront combinations, most with fairly odd names, and some just with web address from a URL-shortening service. (Most, if not all, are no longer available now, as they have since been caught and delisted.)

• Effortring
• Jacketdrums
• Agtef.cn
• GearsRice.top
• bit.ly/2VfFLIQ
• Wantcvut.com
• Solitude.enjoy
• Predictfuture
• fixted.store
• Geoghost.store
• Cokeie.life
• Entriesusers
• Kknower

In every case where I clicked on the ad and followed it to the actual store, the trail was the same: Facebook ad, Shopify store.

Not that there’s anything specifically about Shopify that attracts scammers, although Shopify has managed to create a very simple and usable on-ramp to internet commerce. That easy on-ramp attracts scammers as well as legitimate retailers, but there’s also other options, experts say.

“The general consensus among SEO and SEM experts is that individuals will create fraudulent e-commerce websites on Wix, Shopify and Squarespace around popular Amazon products and highly searched items,” says Yosef Solomon, a 10-year e-commerce veteran who now runs his own online boutique. “This gives them immediate traffic and higher conversion rates especially if the product is sold-out on Amazon.”

My fake Bowflex weights never came. But apparently, that’s not unique. Rather, it’s a way of generating even more income, because many might either forget to contest the charge, fail to do it in time, or contest the charge after the funds have already been transferred.

And by then the scammer might be long gone.

“These companies sometimes have no intention of fulfillment and are often built on fraudulent credit accounts,” Solomon says. “Many times, these websites aren't based in the United States and have no actual way of getting through to any customer service representatives.”

I saw so many of these sites that looked templated that I began to suspect that scammers and fraudsters were automatically generating fake Shopify stores: programmatically spinning up new stores as the old ones get discovered and taken down. Solomon says that’s true, and that unethical developers can auto-create retail sites on Wix, Shopify, and other e-commerce platforms programmatically. Once spun up, a site can be loaded with content scraped from legitimate sites, or injected from a template.

Revealingly, some of the sites had the exact same text on their About Us pages.

I reached out to Facebook about the scammy ads, but did not receive a reply. A Shopify representative did return my email with a form letter, stating that “false or deceptive promotion of listed products and price gouging are violations of Shopify’s acceptable use policy and not aligned with our mission to make commerce better for everyone.”

In addition, the Shopify representative told me, the company has internal tools to monitor for fraudulent activity ... which could account for the fact that most of the stores I saw the fake products on are now closed.

Add it all up, however, and you have an environment in which scammers can “shoot and scoot:” set up a retail ecosystem, feed it with social media ads, collect revenues for some weeks or months, and then bolt to a new set of sites and ad accounts when someone catches on. As long as Facebook and e-commerce platforms enable this merry-go-round, it’s likely to continue.

So what can consumers do?

Taylor McCarthy Hansen, an e-commerce executive, provides six tips that make sense, and would have revealed every single scam I encountered.

1. Check the price isn’t unrealistically good. (If the seller can’t make money it’s a scam.)
2. Check the domain name matches the name of the website. (Most scammers don’t even bother doing this.)
3. Check the domain name isn’t ridiculous. (If it has numbers or junk letters tagged in, they have just gone for a cheap, throw away domain name as they know they’ll only have it a week.)
4. Check what other people say under the Facebook ad. Read the comments.
5. When these sites get pulled, so does the Facebook page they use to advertize. Check the Facebook page has existed and been posting for at least a few months, with positive comments under posts. (Almost all scams have under 3 posts, aside from the advert.)
6. Most of these scammers forget to change the wording on their website privacy pages. Check the privacy page and see if the company name matches the site name.

Ultimately, it’s a tough thing for start-up independent businesses and retailers, but knowing the brand you’re buying from is a big boost in your quest to not getting scammed. Defaulting to Amazon or Walmart isn’t great for your local economy, but it can be safer.

And, if you want to support the little guy, make double-sure it’s a real company with real people and real products, using the tips above. Finally, like I did, use PayPal. PayPal may not be perfect, but it has an automated grievance process. It takes time to process, but eventually you’ll get your money back.

​And then you can spend it somewhere legitimate.

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Source: Forbes