Warning over rise of rogue retailers

Lloyds Bank is warning that rogue retailers are preparing to rip off shoppers in the January sales, offering big online discounts to lure people into purchasing items that are never dispatched.

The number of rogue retailers identified by Lloyds in January 2024 was 140% higher than the normal monthly average across the year, indicating that retailers targeted unsuspecting shoppers looking for bargains during the post-Christmas sales.

The rogue retailers deceive shoppers into making purchases by creating fake websites, made to look like popular high-street brands such as H&M and House of Fraser. However, when shoppers purchase items from these websites, the retailer pockets the cash without dispatching the item.

The scam typically causes credit card transaction disputes to peak in January, with Lloyds seeing a 40% increase in disputes in January 2024, compared to the normal monthly average.

The retailers often use social media to advertise items at a significant discount, attempting to lure shoppers looking for bargains during the January sales. Clothing tends to be the most common item purchased from the rogue retailers, followed by jewellery.

Lloyds estimates that the scam has cost victims £8.5m so far, but many could be missing out on getting their money back, as less than 30% of victims contacted their bank to dispute the transaction.

Gavin Evans, Senior Manager for Consumer Cards at Lloyds, said: “The January sales can be a good time to grab bargains, but it’s also a popular time for rogue retailers, who try to scam unsuspecting shoppers and pocket their hard-earned cash. To avoid being caught out, check the web address before making a purchase to ensure that it is legitimate and matches the shop you’re looking to buy from, especially if you opened the website by clicking on an advert or social media post. Remember that if something appears too good to be true, it usually is. If you’re ever unsure, consider buying from somewhere you trust instead.”

Simon Forbes, Divisional President, UK and Ireland at Mastercard, said: “It’s the time of year when rogue retailers are out in force. At Mastercard, we work hard to help banks like Lloyds spot scam payments before they take place. To avoid being scammed this holiday season, check who you are buying from, beware of offers that are significantly cheaper than elsewhere and report any suspicious transactions to your bank.”