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Scammers taking advantage of supply chain issues with fake shopping sites: "It's like a virus"

Avoid scams as holiday shopping season starts
Avoid scams as holiday shopping season starts... 04:59

As supply chain issues disrupt the holiday shopping season, scammers are making things worse by taking advantage of those challenges with fake websites. 

A new Bankrate survey found that 77% of American adults reported having product-related shopping problems, with nearly half of those for items that were either out of stock or backordered. Scammers are aware of those issues as they, too, approach their big season.

LexisNexis Risk Solutions CEO Haywood Talcove said the company has seen a 2,000% increase in consumers who say they've lost money to scammers posing as legitimate online retailers. The increase, which he said is driven by the ongoing supply chain issues, equals over 5,000 fake sites, up from just 100 or so earlier this year.

"When you go to some of the big-box stores — whether it be Walmart, Amazon, Best Buy — they don't have the toy that you want in stock and then you google it. Then you find this really boutique company that is offering the bicycle that your daughter wants and you think, 'You know what? I'm going to get it,'" Talcove told CBS News' consumer investigative correspondent Anna Werner.

But the site turns out not to be a real company, he said.

"It's a front for a transnational criminal group," Talcove said. 

Iowa high school senior Jayce Leninger is among the victims. When the Billie Eilish fan decided to buy himself a birthday gift of some of the singer's new merchandise, he went on what looked like her bona fide website. 

Leninger said he bought a "bundle" he'd seen on Instagram for a cost of $100. But when the transaction hit his bank account, he said, it showed some $79, which he found suspicious.

"And so after that, I started to look at the website, look up reviews on the website, and there are over 1,000 people reviewing this website saying it's a scam, 'Don't buy. I haven't got my stuff in over half a year,'" Leninger said. 

The discovery came a bit too late.

"Well, I don't have the merchandise or my money," he said.

David Halushka, of the Secret Service Cyber Fraud Task Force, said the fake sites are typically launched from overseas and are becoming increasingly sophisticated.

"They learn as they go, just like you and I. It's their job," Halushka said.

A close examination of the sites often reveals some tipoffs, he said, including misspellings, grammar mistakes, links that don't work and a refusal to accept credit cards. 

"These websites will often only ask for payment via a wire service such as PayPal, Venmo, Zelle... And it's very likely almost impossible for the consumer to get their money back," Halushka said.

"It's like a virus. It just spreads. It doesn't stop until the consumers stop falling for the trick," he said.

Talcove, of LexisNexis, estimates U.S. consumers will have $20 billion stolen by the end of the holiday season.

Correction: The article has been updated to correct the name of David Halushka of the Secret Service Cyber Fraud Task Force.

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