Statistics from the Consumer Goods and Services Ombud (CGSO) annual report highlight the extent to which consumers are being defrauded by rogue online operators.

The Covid lockdown saw an increase in the adoption of e-commerce, and many fraudsters saw an opportunity to trap new victims through online retail.

A quarter of all complaints to the CGSO related to e-commerce in cases where consumers paid for products advertised online but never received them. While some were service issues from legitimate providers, the vast majority were for rogue online operators who were running a scam.

According to the Ombudsman Magauta Mphahlele, the main products involved related to clothing, electronics and hair extensions offered through platforms like Facebook and Instagram.

No recourse when dealing with rogue online operators

Mphahlele explains that as these are rogue operations, they are not registered with the CSGO and therefore it is not possible for the CGSO to investigate. However, the CGSO has issued warnings regarding these operators which include Mr Shopper, Wiegenkind Boutique, Ana Eleven Brand and Liepies Online.

Scams, fake loans and rogue retailers are a growing part of social media and currently there is little the regulators are doing about it.

One way to deal with these entities is for the banks to be more proactive in freezing accounts. If the regulators and industry bodies worked together and shared their complaints with the banks, hopefully more could be done to reduce fraud and even possibly retrieve some of the money taken in these scams.

If you’ve fallen victim to one of these rogue online operators, your first step should be to inform your bank. You then need to give a statement to the police and obtain a case number to provide to your bank.

You should also inform the relevant industry body or regulator. It is only by victims reporting these cases that authorities can start working together to at least shut them down.

Investment scams: Financial Sector Conduct Authority
Loan scams: National Credit Regulator
Retail scams: Consumer Goods and Services Ombud
Retail scams: National Consumer Commission

This article first appeared in City Press.