How to navigate the online marketplace community

Are you planning to sell your unused surfboard or perhaps scouting out a deal on online marketplaces like Facebook Marketplace? It’s important to be aware that the number of buyers and sellers getting scammed on Facebook Marketplace is on the rise.

According to data provided exclusively to the ABC, buying and selling scams increased 78% in the final quarter of 2023, with the majority of these scams taking place on online marketplaces.

It comes as more Australians are looking for practical ways to beat the cost of living pressures. According to the Choosi Clutter 2.0 Report 2024, over two-thirds (61%) of Aussies have been selling personal items and home goods on online marketplaces to declutter and make some quick cash, up from just 45% in 2017.

If you’re new to the online marketplace community or simply need help identifying the most common marketplace scams, this guide covers what you need to know to avoid getting scammed online.

What are the most common online marketplace scams?

There’s no shortage of places to buy or sell second-hand goods online. The Choosi Clutter 2.0 Report 2024 reveals that Facebook Marketplace is the most popular online marketplace among Aussies (67%), followed by Gumtree (43%) and eBay (38%).

However, the same report also found that nearly one-third (28%) of users encountered a scam attempt while using an online marketplace.

So, what are the most common online marketplace scams to watch out for?

• Lost package claims: One of the most common online marketplace scams involves buyers claiming their package has been lost. In this scenario, a scammer claims they never received it, even while they could have received it just fine. So, although it may cost more to have a package tracked and signed for upon receipt, it might be worth it as a protection for yourself as a seller from scams like this.
• Asking for your phone number: Another common scam involves buyers asking for your phone number to discuss an item in more detail. Scammers can then use this information to hack into your accounts or even reroute two-factor authentication to their own devices. It’s best to avoid sharing your phone number with strangers online, where possible and if you’re using Facebook Marketplace, always keep conversations within the Messenger app. It’s also worth noting that you should ensure your passwords are securely stored and regularly updated.
• Overpayment scams: It might sound odd, but some scammers target sellers through overpayment or at least pretend to overpay you, and then they may request a partial refund of money they never sent in the first place. Though this is an easy scam to look out for, the key is to never accept an overpayment. If a buyer does attempt or at least pretends to overpay you, simply decline and ask them to submit the correct amount.
• Sending an item before payment is received: One of the biggest risks for sellers is sending an item before payment is received. If the buyer wants to test or view the product before buying, be sure to offer alternatives, such as meeting in a safe, public place with a friend. If the buyer is unwilling to meet you in person, there is a good chance they may be trying to scam you.
• Sharing suspicious external links or forms: As a buyer or seller, it’s important to keep your transactions within the online marketplace platform and avoid clicking external links. Sharing payment forms via links is a common tactic used by scammers to trick users into clicking links that contain malware or lead users to a malicious website which then works to steal sensitive personal information.

Keep Reading: Discover what to do if you think you’ve been hacked in this practical checklist.

Practical ways to avoid getting scammed

The stats are clear: when surfing second-hand marketplaces, over a third (36%) of Aussies have encountered scams, according to the Choosi Clutter 2.0 Report 2024.

But while scams are common across the platform, there are plenty of things you can do to protect yourself when buying or selling items on online marketplaces. These practical tips will help you identify common red flags early and protect yourself online so you can avoid getting scammed.

Look out for common red flags

One of the benefits of Facebook Marketplace that distinguishes it from other online selling platforms is the level of transparency users have thanks to person-to-person transactions.

Unlike other platforms that allow users to run anonymous ads, users need to set up a Facebook profile to sell on Marketplace, which typically includes full names and photos.

As a result, it can be easier to spot some scammer red flags by reviewing a seller’s Facebook profile.

Check the date the account was created by scrolling down to ‘Seller information’ and finding the year they joined Facebook. If the account you’re engaged in a transaction with was only created very recently (in the past few weeks or months), you should approach it with caution, as it may suggest that it has been specifically created to scam people.

But there are other red flags you should also look out for on Facebook Marketplace, including:

• Sellers or buyers wanting to communicate off the Facebook platform, such as via email or text messages
• Sellers listing items for incredibly low prices that seem ‘too good to be true’
• Sellers only accepting payment via credit card details shared online (instead of secure payment options such as PayPal, Apple Pay or Google Pay)
• Sellers or buyers requesting that you set up a new PayPal or similar account, in order to process the transaction.

Check a seller’s past customer reviews

Sellers will generally have reviews and ratings from those who have bought from them in the past. Positive reviews from other buyers can help alleviate any concerns you might have about the transaction and provide a layer of confidence.

But again, be sure to check these reviews carefully. If a seller has no reviews or if the reviews seem suspicious (for example, you notice the same user is leaving a number of glowing reviews), then this may be cause for concern.

Request cash payments wherever possible

When it comes to transactions, cash is always king. Be sure to use cash transactions at all times, whenever possible.

By only paying in cash and meeting sellers or buyers in person (in a safe, public space), you can avoid any suspicious transactions or scams that seek to garner more of your personal information and ensure your exchange is secure and straightforward.

That being said, some digital payment options are still secure. Unlike third-party applications, PayPal is a secure method of payment that investigates fraud claims in case you fall for a scam. For extra security, make sure you link a credit card to your PayPal rather than a debit card, as credit cards can offer better fraud protection.

Alternatively, Apple Pay and Google Pay are other secure payment methods you can use if buying or selling an item that needs to be shipped.

Choosi Tip: A common payment scam used on Facebook Marketplace is buyers requesting to use PayID (a payment method where you use phone numbers or email addresses to send and receive money). Avoid accepting payment via PayID, as scammers may use this to overpay for an item (or sometimes pretend to overpay for an item) and then request that you repay this overpayment using PayID—opening the door to scammers attempting to gain access to your personal information and your money.

Steer clear of paying via pre-loaded gift cards and cryptocurrency

Gift card scams are commonly used and often involve a seller asking buyers to purchase gift cards rather than paying through the online marketplace or another payment app.

In other words, if a scammer is “selling” an item worth $150, they’ll tell the buyer to put that money on a Visa gift card. The scammer then asks the buyer to send the gift card number and PIN before they ship the item, at which point the buyer may never receive the item at all.

As well as being untraceable, pre-loaded gift cards and even cryptocurrency can’t be refunded which is why scammers prefer to target them as a form of payment. If a seller is pushing these options to you when you express interest in buying something, it’s best to avoid the sale.

How to protect yourself and your finances

According to ScamWatch, there are three simple steps you can take to lower the chances of getting caught by an online marketplace scam: Stop (don’t give money or personal information to anyone if you’re unsure), Think (could this message be fake?) and Protect (act quickly if something doesn’t feel right).

As the strategies above suggest, there are ways to identify scammers in the online marketplace community to ensure you stay protected.

However, having financial protection in place in the form of life insurance may give you even greater peace of mind. Compare a range of life insurance policies with Choosi today and consider protecting things you’ve worked so hard for.