SEOUL – As overseas direct purchases (cross-border e-commerce) become increasingly popular, so too has the incidence of fraud, leaving consumers vulnerable to scams ranging from counterfeit goods to sellers who vanish after receiving payment. A significant portion of these fraudulent activities originates from shopping malls advertised on social media platforms like Instagram and YouTube, prompting calls for greater vigilance and preventative measures.

Data from the Korea Consumer Agency (KCA) reveals a dramatic surge in reported cases. Consultations regarding fraudulent overseas direct purchase shopping malls registered through the International Transaction Consumer Portal totaled 2,064 between 2021 and 2023. The problem has escalated sharply, with 1,372 cases reported in 2023 alone, a more than five-fold increase compared to the 251 cases in 2021.

A breakdown of 1,821 cases where the access route was confirmed paints a clear picture of social media's role in these scams. A staggering 82.3% of victims were lured through social media platforms. Instagram emerged as the primary culprit, accounting for 41.8% of these cases, followed by YouTube at 25.3%. This dominance of social media in facilitating these scams underscores the need for increased scrutiny of advertisements on these platforms.

The most common types of fraud involve "brand impersonation," representing 47.1% of reported incidents. In these cases, fraudsters create elaborate shopping malls mimicking well-known fashion brands, only to disappear with consumers' money after a purchase is made. Another prevalent issue is the "sale of low-quality products," accounting for 46.5% of cases. These fraudulent sellers often refuse refunds for substandard goods, offering only partial reimbursements, if any. This dual problem of counterfeiting and substandard products further complicates the landscape of overseas direct purchase fraud.

The KCA is taking action to address this growing issue. They plan to collaborate with Meta and Google to crack down on illegal and harmful content and advertisements promoting these fraudulent shopping malls. Furthermore, they are working with the Korea Communications Commission to block access to these sites, aiming to disrupt their operations and protect consumers.

Experts Warn Consumers to Exercise Caution

Consumer advocates are urging individuals to be extremely cautious when engaging in overseas direct purchases, especially those originating from social media advertisements. They offer the following advice:

Beware of Suspicious Shopping Malls: Be wary of deals that seem too good to be true. Excessively low prices and questionable advertisements are often red flags for scams. Research the seller thoroughly before making any purchases.
Approach Social Media Ads with Caution: Recognize that shopping malls promoted through social media advertisements carry a higher risk of being fraudulent. Don't let enticing visuals or influencer endorsements cloud your judgment.
Verify Shopping Mall Information: Before making a purchase, meticulously check the shopping mall's contact details, address, business registration information, and any available customer reviews. Searching for feedback from other buyers can provide valuable insights into the legitimacy of the seller.
Use Credit Cards for Payment: Credit cards offer greater protection than cash payments, as transactions can often be disputed and canceled within a specific timeframe. This added layer of security can be crucial in recovering funds lost to fraudulent sellers.
Report Fraudulent Activities: If you fall victim to overseas direct purchase fraud, report the incident to the International Transaction Consumer Portal or the Korea Consumer Agency. These organizations can provide guidance and assistance in navigating the recovery process.
The rise of overseas direct purchase fraud poses a significant challenge to both consumers and regulatory bodies. By raising awareness and implementing preventative measures, authorities hope to curb these scams and protect consumers from financial losses and the frustration of dealing with fraudulent sellers. The collaboration between consumer protection agencies, social media platforms, and communication commissions is crucial in tackling this evolving threat.