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Business identities stolen in Facebook scam

Adam Zuchetti
Adam Zuchetti
04 July 2019 3 minute readShare
Western Australia Consumer Protection

At least four businesses have had their identities stolen online as part of a Facebook scam that has claimed “many victims” from all over Australia, consumer agencies have warned.

The unidentified retailers are four Perth-based mobile phone businesses, according to WA’s Consumer Protection agency, which are being impersonated by way of fake Facebook profiles.

Consumers responding to advertisements for discounted phones are directed to the fake profile, it said. From there, unsuspecting customers communicate directly with the scammers, and are asked to make upfront payments, but the phones they purchased never arrive.

“The victims are lured by the low prices and soon find themselves out of pocket, with some paying up to $2,000 for multiple phones,” said commissioner for Consumer Protection Penny Lipscombe.

Customers have then calling and even visiting the legitimate businesses demanding their purchases be honoured, only to be advised that they have fallen victim to the scam.

“The innocent businesses affected are having their brand names trashed by this scam,” Ms Lipscombe said.

“As soon as they get one fake Facebook page shut down, another one pops up in its place, so it’s a very frustrating experience for them.”

A spokesperson for Consumer Protection told My Business there have been 11 reports from customers in recent weeks, all from Australia’s eastern states, with losses nearing $9,000. However, the true number of victims is likely to be much higher.

“The four businesses report that they have received numerous calls from victims, so we believe the figure is much more,” the spokesperson said.

A couple of the Perth stores reported that victims were coming into the store to collect their phones, so we believe there are numerous Perth victims as well that haven’t reported to us.

Ms Lipscombe said that regulators are “able to get fake Facebook ads and pages closed down very quickly”, and she urged any businesses affected by such scams and identity theft to report any delays in having fake profiles taken down.

“Businesses are easy targets for scammers looking at stealing identities, as their websites have all the material necessary to set up a fake ad, such as logos and the store details,” she said.

The commissioner also warned consumers to be wary of where they spend their money.

“We recommend that online shoppers take time to locate the real website of the legitimate business they think they are doing business with and contact them independently to verify their offer is genuine, before parting with any money,” she said.

“Being asked to pay using a direct bank transfer can be an indication of a scam. Pay by credit card through a secure payment method; that way you can claim a chargeback if the goods don’t arrive.”

Consumer Protection told My Business that the affected businesses did not want to be identified or speak publicly about their experience.

It is not just product builders but also service providers that have been imitated by scammers in the past. In January this year, it was revealed that two customers collectively paid more than $70,000 to scammers impersonating the housebuilder they had contracted.

Tip of the iceberg

This latest scam is just one of thousands that have been reported in the first six months of 2019.

An ACCC spokesperson said that between January 1 and June 30, more than 3,200 scams involving Facebook were reported.

“Scamwatch received over 3,200 reports of scams listing Facebook as the website, app or social media platform through which they were contacted, with losses of more than $3.75 million,” the spokesperson told My Business.

“Of these, almost 100 related to the sale of mobile phones with total reported losses of over $50,000.”

Some 78 per cent of these losses occurred where funds were paid via a bank transfer.

On this particular scam, the ACCC said it is not just phone stores in WA that are being targeted.

“Scamwatch reports indicate this scam is also targeting stores outside of WA, with legitimate phone stores in NSW being impersonated too,” the spokesperson said.

“In some cases, scammers are not just impersonating phone stores, but are hiring local Australians with Facebook profiles to advertise cheap phones on Facebook Marketplace under their own name.

“When victims contact the person advertising the phone, they are directed to the scammer’s store.”

Victims of this or similar scams are being urged to report their experience to the Australian Cybercrime Online Reporting Network (ACORN).

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Business identities stolen in Facebook scam
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Adam Zuchetti
Adam Zuchetti

Adam Zuchetti is the former editor of MyBusiness and a senior freelance media professional, specialising in the fields of business, personal finance and property. In 2020, he also embarked on his own business journey – inspired in part by the entrepreneurs and founders he had met through his journalistic work – with the launch of customised pet gifting and subscription service Paws N’ All.

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