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The increasing number of businesses on social media has made it hard to distinguish scam sites from authentic ones. So when Abiola Benedicta, a 36-year-old mother of three, saw a CAC certified declutter store on Instagram, she jumped at it. She inquired about the price of a fridge, a microwave, and a blender, which were perfect for the fruit diet she was starting the following week. The total amount came to 125k, and she proceeded to make payment. However, Benedicta grew suspicious when she noticed she could no longer interact with the declutter site. She had been blocked.

Blessing is just one of many shoppers lured in by scammers masquerading on platforms that should signify legitimacy. Scammers go to great lengths, setting up fraudulent business sites complete with CAC certification and online bank accounts. This trend is worrisome as 89% of internet consumers heavily rely on online shopping, with another 24% planning to do so in the near future.

“It’s the loopholes with these platforms that the scammers exploit,” said Lois Uloma, a commercial lawyer who has taken a proactive approach to identifying and exposing fake sites attempting to register with the CAC. “Although the registration process with the CAC involves certain checks and requirements, it primarily focuses on verifying the business’s legal structure, ownership, and compliance with statutory regulations. The registration process alone may not uncover fraudulent intentions or prevent unethical practices.” These scammers exploit this dynamic, making it easier for them to deceive individuals. “It’s playing on the trust of the consumer,” said Oyindamola Aduke, the owner of Adukes_Declutterspace, an affordable e-commerce store for thrift household items in Lagos.

These scammers operate within networks of fraudsters targeting online shoppers. Over the past few years, these networks have formed a cyber threat supply chain, where different groups specialize in specific skills. One group might identify potential targets, while another creates deceptive materials. To make their schemes more convincing, these scam sites often employ the same tactics as legitimate retailers, such as utilizing paid search optimization tools, mobile apps, and advertising strategies to generate traffic. They can go as far as buying followers and verification badges on social media. “Consumers often mistake these signs as indicators of legitimacy,” said Yunus (Coy Emerald) Oyetunde, the CEO of O-range, a cybersecurity and training services company that uses ethical hacking to offer a full website and application penetration testing service. 

“Some of these red flags are quite glaring,” said Oyindamola of Adukes_Declutterspace.”I went through a (fake) page and could spot the lapses almost instantly. I was almost upset with people for falling for it. However, in my line of business, I’ve discovered that many of my customers are older and not as internet-savvy.” Unsurprisingly, in the first quarter of 2023, the number of new internet subscribers in Nigeria increased by 2.7 million.

In the Nigerian retail market, the online share is 2.0%. Among them is Tamzy’s Empire, an online wig store known for its affordable hair products with over 12k followers on social media. The brand which also has a website, conducts all its activities through its Instagram site and website. A few months ago, Tamzy’s got wind of an imposter site. This imposter closely mimics the genuine one, down to the smallest details like the pink flower next to its business name. “I thought it was your backup page,” one customer commented after Tamzy’s put up an Instagram post notifying customers of the imposter. Last month, Tamzy’s attended to half a dozen reports from customers claiming to have been scammed by the imposter. All victims had similar reports, the imposter had engaged them in conversation and when it was time to pay for the product, they had sent an Opay account number with the business name, making them believe they were legit, as explained by Tamzy’s owner, Loveth Tambou, in a video now pinned on her Instagram business page.

The Nigeria Interbank Settlement Scheme reports that the number of online scams, in general, grew by 186 percent from 2019 to 2021. Among all online scams, the ones where the victim trusts the scammer are the most harmful in terms of the likelihood of losing money and the median amount at stake. In a report by Fresh Angle,  Henry Olawale Owolabi, Country Manager for DPO Pay, says his company has found that around 60 percent of users would rather opt for pay-on-delivery options than share their card details when using online payment options. The more this trend gains popularity within the realm of online retail, it is inevitable that shoppers will become more cautious and apprehensive about engaging in online shopping.

Social media retail scammers do not focus on a specific sector but tend to exploit trending or emerging spaces like the online declutter space. When Oyindamola started her decluttering businesses three years ago, there were only a handful of declutter pages. Today, there are several declutter pages in Lagos alone, likely influenced by the tough economy. “There are more people traveling out of the country who, of course, want to sell their property. Others are just selling their property to make extra money,” said Oyindamola of Aduke’s space. Scammers exploit this, with some going the extra mile to offer incredible discounts to lure customers. In at least one instance, a declutter page offered a 50 percent discount on all thrifted items.

For genuine online retailers, having scammers lurking around feels like a never-ending task. As soon as one site is flagged and shut down, another one emerges. Each time with a worse tactic than the last. Most recently is the tactic targeting unsuspecting customers under the comment sections of genuine businesses. The scammer would stake out in the comment section, simply identifying potential victims by their incessant questions, such as “I want” or “How much?” and their unruly attempts to place orders via the comment section. To reduce the number of victims, retailers are constantly educating their customers on how to identify fake pages and training their customer service representatives to assist affected shoppers. Hence the reason popular online savings platform Piggyvest’s customer care chat includes a clear message to customers, please be sure not to engage with any other accounts or click on any links from anyone claiming to resolve your complaint. This is our only official account.

Yet the loopholes persist. Unlike banks, which require more rigorous forms of verification, fintech platforms strive to be more user-friendly. While this approach might be an attractive feature for users, for some of them, it means neglecting some authentication procedures, which can be exploited by scammers. When Tamzy’s shared the precaution post, one of the striking comments was from Grace, a business owner whose pre-knowledge of this tactic made her open a dormant account on Opay to prevent scammers from opening an account with her business name. “I heard that there can’t be two accounts with the same name,” she said. When Tamzy reported the situation to Palmpay, they sprang into action, bringing down the account. However, she is yet to get a response from Opay.

Ultimately, safety remains the customers’ responsibility said Yunus. It is important for consumers to conduct thorough research and due diligence. This may include verifying the website or business’ reputation and checking online reviews and ratings. “A simple search on Google with the keyword scam in front of the business name can go a long way,’ he said. “Customers should also verify addresses, phone numbers and learn to seek professional advice.” According to Barrister Lois, although most of these cases are not brought to court because of the difficulty in identifying the scammers, people who have been scammed via these websites should not just keep quiet but endeavor to report to the police and even take steps to report the accounts to the relevant service providers so it can be taken down. “The new Copyright Act 2022 makes provision for service providers to take down any online content that is counterfeit and encourages the buying, selling, and distribution of infringing content. They can sue the owners of the page if they have their correct information, like address, names, or phone number.”

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