How one victim lost R11 000 to elaborate e-commerce fraud

A City Press reader was recently scammed of R11 000 when he bought goods through a website selling electronic goods. His experience highlights the need to be cautious about who you are dealing with on the internet and to apply some common sense before handing over your cash.

The customer purchased a home theatre off Digital World’s website (www.digitalsafrica.wozaonline.co.za) after seeing an advert on the Internet. He paid R6500 into their bank account, however when the goods were supposed to be delivered he received an email from a courier company Premier Logistics (www.premlogist.com) to say that he had to pay an additional R4050 for import duty because the package came from U.K. “All of which was a surprise because on their website they said delivery was free and that the goods were in stock, there was no mention of importing,” says the customer, who asked not to be named. “As desperate as I was, and now suspecting that I might have lost R6 500, I went on and deposited the R4 500 they wanted for the ‘import duty’”.

Needless to say the customer did not receive the goods and received a further email from Premier Logistics stating that they had found five additional products in his package and should now pay a further R6 050 for some certificate.

It appears that Premier Logistics is the source of the scam and it sets up fake e-commerce websites around the world which then ‘use’ Premier Logistics to courier the goods. The logistics website even has a tracking system which has the customer details, making it all look fairly legitimate until you realize that the delivery time line makes no sense.

The customer investigated and discovered that that Digital World did not even operate at the office building it claimed as its address in East London. When City Press tried to contact the company, the owner put the phone down as soon as we stated who we were. . “A lot of people have been scammed by this company, I only found this out on forums after I myself had also been scammed,” says the victim.

The customer’s only recourse now is to report the company to the police for fraud and to inform the Department of Trade and Industry; it is very unlikely he will recover his money. His story however raises some important warnings.

Grant Fleming of Fontera Digital Works, a digital solutions provider, says the first warning sign is when an online company asks you to pay cash into their bank account upfront before receiving the goods. All legitimate online retailers or e-commerce sites offer secure online payment mechanisms through the site. If payment is to be made by electronic transfer then this is usually done on a “cash on delivery” basis.

He also says one should only deal with well-known online brands. If it is the e-commerce site for a physical store, one should at least know where the store is and that it exists. “In this case he may as well have handed money over to a person in the street and asked them to buy him a TV and bring it to his house. In fact he may have had a better chance of receiving the TV this way,” says Fleming who adds that South Africa is becoming a major target for cybercrime.

The 2012 Norton Cybercrime report found that South Africa came third in the world in terms of the highest number of cybercrime victims – around 80% of internet users have been a victim of some form of cybercrime. Fleming says we are an emerging market and both users and providers are still learning how to protect themselves, making us an easy target.

Fleming says before buying online one should make oneself more aware of what a legitimate site looks like. In this case Digital World’s site is very amateurish. Any decent online retailer would have spent money on a site that works properly and is visually appealing as well as having security features.

Go onto large retailers like Kalahari.com or Kulula.com and look at the security features they employ and see if the site you want to transact with has similar security. There should be an SSL (secure socket layer) certificate or an image of a lock to show that it is secure. It may also have a logo “secured by thawte”. You should be able to click on these to see that they are valid. If the certificate is not valid, an error will come up when performing a transaction.

While some sites may not show the security features on the home page, as soon as you move onto the payments page these security features will show and the website address should open with https:. If none of this occurs Fleming says you should stop the transaction immediately.

Another rule is to never open a website via a link in an email you receive as fraudsters are now moving from banks to online retailers to find ways to steal your banking information. Fleming says fraudsters are now sending fake emails pretending to be from large online retailers asking you to click on a link to confirm your product or provide your banking details. “Always type in the address yourself,” warns Fleming.

Also use social media and Google to investigate before you transact with a company. A quick Google search showed many warnings about both of the companies.