E-commerce Scams and Delivering a Safe Shopping Experience for Shoppers in Singapore

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Singapore’s e-commerce landscape is booming, offering incredible convenience and variety for shoppers. However, this growth has also attracted a surge in fraudulent activity. According to the Singapore Police Force (SPF), e-commerce scams skyrocketed in 2023, becoming the second-most reported scam type.

The number of cases more than doubled from 4,762 in 2022 to a staggering 9,783 in just one year. This concerning trend highlights the ease with which scammers exploit the online shopping environment. E-commerce scams are attractive to criminals due to their low cost, remote execution, and the difficulty authorities face in prosecuting perpetrators operating anonymously across borders.

This article lists different types of e-commerce scams, exploring the different tactics fraudsters employ and the best practices to safeguard yourself as a seller in Singapore’s thriving online marketplace. By understanding the common tactics and implementing preventative measures, you can sell confidently and avoid becoming a victim of e-commerce scams.

What are E-commerce Scams?

E-commerce scams encompass a wide range of cybercrimes targeting online shoppers and businesses. These malicious activities aim to deceive individuals or exploit vulnerabilities within the online retail environment for personal gain. Criminals may target either businesses or consumers, aiming to steal personal information or financial details or conduct fraudulent transactions. 

The consequences of e-commerce scams can be significant.  Both businesses and consumers can incur financial losses.  For businesses, a reputation can be tarnished by association with scams, leading to lost customers and a decline in trust.  Consumers face the risk of having their personal or financial information compromised, which can lead to identity theft or financial losses.  

Fueled by the ever-increasing popularity of online shopping and the development of sophisticated fraud techniques, e-commerce scams pose a growing threat.  While numerous variations exist, many e-commerce scams fall into three main categories:

  • Phishing: Ever feel like you’re losing customers to suspicious emails? Phishing scams can trick potential buyers into giving their credit card details to fake websites pretending to be yours. By implementing strong security measures and educating customers on how to spot phishing attempts, you can build trust and keep their business with you.
  • Malware: Malware infections can wreak havoc on your customers’ devices. Imagine a customer placing an order only for malware to hijack their session and steal their payment information! By partnering with reliable security providers, you can ensure a safe shopping experience that protects both your customers and your reputation.
  • Data Scraping: Data scraping exposes your customers’ information and leaves them vulnerable to identity theft or targeted scams. They are a nightmare when it comes to retaining customer trust and, hence, loyalty. Robust data security practices show your commitment to protecting customer privacy, making them more likely to choose you over competitors who might be less secure.  

How do E-commerce Scams Affect Your Business

E-commerce scams pose a significant threat not just to consumers, but also to the businesses that operate within the online marketplace. Here’s how these scams can negatively impact your e-commerce business:

  • Eroded Consumer Trust: When scams are associated with the products you sell, it erodes consumer trust. Customers become wary of shopping online, fearing they may become victims of fraud. This can lead to a decline in sales and customer base.
  • Reputational Damage: A single high-profile scam associated with your business can cause significant reputational damage. Negative news coverage and online reviews can tarnish your brand image, making it difficult to attract new customers and retain existing ones.
  • Potential Legal Implications: Depending on the nature of the scam and your role in it, there could be potential legal implications for your business. Authorities may investigate your platform’s security measures and take legal action if deemed necessary.
  • Drop in Account Health Score: Many online marketplaces track seller performance through account health scores. Scams associated with your platform can lead to poor ratings and increased order returns. This high influx of poor serviceability will negatively impact your score, potentially leading to restrictions on your account or even termination.

While the impact on businesses is severe, it’s important to remember that the consequences for customers can be even more devastating.  Victims of e-commerce scams may face long-term implications such as identity theft. This can lead to damage to their credit score, unauthorized transactions on their accounts, and even legal problems if their stolen information is used for criminal activity.

It’s crucial to prioritize the safety of your customers and implement robust security measures to prevent e-commerce scams from occurring on your platform.

Type of E-commerce Scams

The world of e-commerce scams is vast and constantly evolving, but some tactics remain prevalent. Here’s a breakdown of some of the most common e-commerce scams businesses and consumers need to be aware of:

  • Identity Theft: Criminals target personal information like names, addresses, and Social Security numbers. This stolen data can be used to make unauthorized purchases, open new accounts, or even commit financial crimes in the victim’s name.
  • Credit Card Fraud: Fraudulent actors obtain credit card information through various means, including hacking, phishing scams, or skimming devices at physical stores. Once they have this information, they can make unauthorized online purchases.
  • Chargeback Fraud: In this deceptive tactic, customers dispute legitimate charges with their credit card companies to obtain a refund, even though they received the product or service. This can be a significant issue for businesses, especially those selling digital products or services.
  • Phishing and Social Engineering: These scams rely on psychological manipulation to trick users into revealing sensitive information. Phishing emails or messages often appear to be from legitimate sources (e.g., banks, popular retailers), urging recipients to click on malicious links or provide personal details.
  • Account Takeover Fraud: Criminals use stolen login credentials or exploit vulnerabilities to gain unauthorized access to customer accounts on e-commerce platforms. Once in control, they can make fraudulent purchases, steal personal information, or even hijack the account for further criminal activity.
  • Refund Fraud: This scam involves customers requesting a refund for products they never purchased or returning stolen or counterfeit items for a full refund on the original product.
  • Affiliate Fraud: This deceptive tactic involves manipulating affiliate marketing programs. Fraudulent affiliates may use click farms, bots, or fake accounts to generate artificial traffic and inflate their commission earnings.
  • Counterfeit or Fake Products: Fraudsters flood the online marketplace with counterfeit versions of popular brands or sell entirely fake products. These products are often of inferior quality and may even pose safety risks.
  • Dropshipping Fraud: Dropshippers may engage in deceptive practices, such as misrepresenting products, using fake reviews, or failing to deliver products altogether. This can lead to customer dissatisfaction and damage the reputation of legitimate dropshipping businesses.

E-commerce Scam Prevention Best Practices

Creating a safe and secure online shopping environment is crucial for both businesses and consumers. By implementing robust security measures and fostering a culture of awareness, businesses can build trust with their customers and minimize the impact of e-commerce scams. Here are some key best practices to consider:

  • Software Updates: Maintain a proactive approach to security by regularly auditing and updating software and security patches. This helps address vulnerabilities that criminals could exploit.
  • Communication is Key: Provide clear and accessible communication channels for customers to report suspicious activity. This could include a live chat function, email support, or a dedicated hotline. Promptly investigate reports and take appropriate action.
  • Educate the audience: Offer educational resources to your customers on e-commerce scams and safe shopping practices. Inform them about common scams, red flags to watch out for, and how to protect their personal information.
  • Building Trust: Consider offering buyer protection programs that provide additional security and recourse for customers in case of fraudulent activity. This can significantly increase customer confidence in your platform.
  • Fraud Prevention Tools: Stay informed about the latest e-commerce scams and invest in up-to-date fraud prevention software and services. These tools can help identify suspicious activity and prevent fraudulent transactions.
  • Secure Deliveries: Partner with reputable last-mile delivery companies, such as those on Locad’s roster, with a strong track record of security. Implement clear inspection procedures to prevent counterfeit products from entering your inventory.
  • Enforce Maximum Purchase Quantity: Promotion season often means that people want to stock up more than required. But this can also mean fraud and over-purchasing. Shopee, Shopify, Lazada, and many other marketplaces offer the option to limit purchase quantity, making it less likely for scam purchases to go through and ensuring a fairer purchase experience.
  • Update Your Login Details And Passwords: Never share any personal details or passwords with anyone other than your business partners. Furthermore, avoid sharing or scanning any suspicious QR codes and avoid conducting transactions outside the marketplace in question. 
  • Refer potentially fraudulent buyers: Shopee, Shopify, TikTok Shop and Lazada —all offer sellers the option to report any buyers that exhibits fraudulent behaviour. So ensure that in case a situation like this occurs, you report it.

How a 3PL Can Help

Fraudulent buyers are a constant threat to e-commerce businesses. They can cost you money, damage your reputation, and erode customer trust. However, a strong partner like a third-party logistics provider (3PL) such as Locad can be a valuable weapon in your fight against fraud. Here’s how:

  • Cash-on-Delivery (COD) Option:  For high-value items or orders with suspicious red flags, a 3PL can offer cash-on-delivery (COD) as a payment option. This reduces the risk of fraudulent credit card transactions and ensures you only ship the product once payment is received.
  • Enhanced Order Tracking and Visibility:  A good 3PL provides real-time order tracking and detailed visibility into the fulfillment process. This allows you to monitor suspicious activity, such as package diversions or attempted deliveries to unusual locations.
  • Fraudulent Activity Reporting:  Many 3PLs offer reporting tools that can identify patterns in fraudulent orders. This data can help you refine your fraud prevention strategies and identify new red flags to watch out for.


The e-commerce landscape offers undeniable convenience, but it’s crucial to be aware of the ever-present threat of scams.  Singapore, with its booming online shopping scene, has unfortunately seen a surge in e-commerce scams.  These scams not only cause financial losses for consumers but also erode trust in online marketplaces and businesses.

Understanding the different types of e-commerce scams, from phishing attempts to fake product listings, empowers both businesses and consumers to navigate the online shopping world with confidence. As a business, you can take proactive steps to create a secure platform by implementing robust data encryption, partnering with reputable payment processors, and fostering open communication with customers.  Educating customers about safe shopping practices and offering buyer protection programs are also key to building trust.

Locad is committed to empowering businesses to create a safe and secure online shopping experience.  Moreover, we partner with last-mile carriers with advanced security in COD orders and offer proof of delivery for further peace of mind. Additionally, our pick and pack operations ensure that counterfeit goods don’t go back into stock and into circulation.

So, if you’re ready to safeguard your online journey, contact Locad today to learn more about our e-commerce solutions and how we can help you build a thriving and secure online business.


There isn’t a single law, but Singapore has strong legislation against fraud and theft, which applies to e-commerce scams.

Phishing scams, fake listings, account takeovers, and refund fraud are some of the most prevalent e-commerce scams in Singapore.

Penalties vary depending on the severity of the scam but can include imprisonment, fines, or both.

Report e-commerce scams to the marketplace in question and the Singapore Police Force (SPF) through their online portal.

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