Fake Shopping Apps Fool Thousands of Consumers Every Day

Scammers launch phony shopping apps posing as top name brands and stores: Internet Scambusters #741

Everyone's doing it these days - using shopping apps on their smart phones to make purchases.

But not all retailers have their own apps. So, scammers have stepped in and set up fake ones in their place.

We'll explain what the crooks are up to in this week's issue and give you 7 tips on how to avoid these tricksters.

Now, here we go...

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Fake Shopping Apps Fool Thousands of Consumers Every Day

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For most of us, the holiday season may seem to be a distant memory now -- but not for those who were scammed by using a fake shopping app.

But these tricks aren't just for Christmas. More and more of us do our shopping not just online but also particularly by using smart phones and other mobile devices, so the risk rises of being scammed via one of these bogus apps.

The mobile shopping market is said to be worth around $50 billion a year in the U.S. alone and research shows half of all mobile consumers say they download at least one new shopping app every month.

These statistics signpost the underlying danger: although most big retailers have a strong online presence, many of them actually don't have their own specific app -- that is one that uses their name and sells only their products.

According to specialist site Retail Dive, only one in three stores that sell online have an official Apple (iOS) or Google (Android) app.

This leaves the way open for scammers to set up their own apps in the name of well-known (or less well-known) stores or brands.

Another retail specialist, Branding Brand, reported in November that imitation apps had been set up with such famous names as Nike, Pandora and Coach.

Just before Christmas, a bogus Coach app was promoting a "20% off" discount sale, while Kanye West fans were being baited by another fake app called Sports Shop: Yeezy Boots.

"This can happen to any retailer at any time," the site warned, "and those who are choosing not to build apps are quickly finding out that if they don't someone else will."

It added that retailers such as Dillard's and Dollar Tree had been strongly criticized by consumers who felt let down when they tried to install what turned out to be imposter shopping apps, loaded with pop-up ads.

"Unaware that these are not real apps, shoppers don't understand why their favorite retailers are leaving them feeling disappointed, confused and angry," said Branding Brand.

The New York Post reported that the fake Kanye West shopping app had been pulling in 7,600 daily visitors. There's no information yet on how many people have been tricked into spending money through these apps or how much has been lost but it seems likely to run into many thousands of dollars.

The Post claimed that one single scammer was operating 35 fake shopping apps.

Apple has reportedly already pulled several bogus apps and rejected others on discovering they were imposters but it seems that Google may not have been so quick off the mark.

Just to make things worse, it seems that even retailers who do have their own apps are now being targeted with bogus apps that mimic the real thing, which makes it difficult for shoppers to be sure they're not being conned when they buy via mobile.

For example, if you do a search on a particular brand name on the relevant app store, it may return several results, not all of which may be genuine.

Victims face the risk not only of paying for goods that they never receive, but also having their credit card details stolen and used for fraudulent purchases.

This isn't a problem that's likely to disappear any time soon, as our recent Top 10 scams list showed: ID Thieves, Imposters and Malware Head our New Top Scams List.

So, what can you do to protect yourself?

Here are 7 key steps:

1. If you want to know if a retailer has an app, visit their website first. If they have an app, they'll almost certainly be promoting it, usually with a link to the appropriate app store.
2. You can also do a broader web search using the name of the store or brand together with words like "fake app" or "fraudulent app" to see if anyone has reported being scammed.
3. Check out reviews for the app on Apple or Google app stores. Be wary if there are no reviews, though, of course, it's possible the app could be new and genuine -- again, you can check this out via the store's website.
4. Check the wording of the app description. If it uses poor grammar or misspellings, that's a red flag.
5. If you're in any way suspicious, don't use a gift card to make your purchase. Use a credit card, which offers a good degree of protection against fraud.
6. Make sure you keep a record of all your purchases, printing out or saving receipts. At the very least, do a screen-grab of the item you purchased and any online confirmation. If you don't know how to save a screen image, check with your device manufacturer or user guide.
7. Keep a close eye on your bank and credit card statements for any unusual activity.

For more information about mobile apps including malware and other security issues, check out this US Federal Trade Commission (FTC) guide Understanding Mobile Apps.

There's no doubt that shopping apps are a great boon in our busy consumer world -- but only if we take the right steps to ensure they're genuine.

Alert of the Week

Pretending there's been unusual activity on your bank or credit card account is a favorite trick scammers use to get you to hand over your account details.

Now they're trying it out on users of Apple's iCloud storage service.

If you get an email, as one of the Scambusters team did, with a subject line like "Your Apple ID was used to sign in to iCloud", take a look at the "From" line and you'll likely see a name that has nothing to do with Apple.

Don't click on the "Learn more" link.

Apple does use this wording for a genuine alert but you should go straight to your account to check if it's genuine.

For more information, visit If You Think Your Apple ID Has Been Compromised.

That's all for today -- we'll see you next week.