Arrests over ‘fake trader’ sites with allegations customers have been defrauded $250,000

A man and woman have been arrested in Queensland on charges relating to a string of “fake trader” websites that have allegedly defrauded customers of more than $250,000.

Queensland Police reports the arrests were made after an investigation by the State Crime Command’s Financial and Cyber Crimes Group.

The charges came about through Operation “Papa Caffeine”, which was launched as a result of over 200 complaints to Australian Cyber Online Reporting Network (ACORN) between January 2016 to May 2017 about fake websites, the police said in a statement.

The complaints identified 28 different seemingly legitimate websites that advertised heavily discounted outdoor furniture goods and marine equipment, such as barbeques, motors, and fitness equipment.

Victims of the alleged scams were directed to make payment via credit card or direct deposit, with 45 victims said to be affected in Queensland online. The customers were then sent an invoice, but the items were then allegedly never delivered.

Customers trying to contact the business for further details reportedly found contact numbers were disconnected and emails left unanswered.

Both the man and the woman have been charged with over multiple counts of fraud and one count of money laundering, and are due to appear in the Brisbane Magistrates Court today.

“This arrest was the result of information provided to us by members of the public through the ACORN reporting system and we continue to encourage anyone who is effected by Cyber Crime offences to report the information on the ACORN system,” fraud and cyber crime detective superintendent Peter Brewer said in a statement.

More and more concerns raised over online businesses

Australian Small Business and Family Enterprise Ombudsman Kate Carnell told SmartCompany concerns around online transactions are being raised by SMEs “more and more often” as online business to business transactions become more commonplace.

“Small businesses need to be really aware that if an offer is too good to be true, it probably is. It’s important to check out the business you’re going to trade with beforehand, do a bit of due diligence,” Carnell said.

“Don’t just assume a business is legitimate because it has a smart website that looks okay at first glance.”

Carnell advises business do some rudimentary checks for purchases made from unfamiliar or low-price websites, including jumping on Google Maps and checking out their business location.

“Check the address is a real business, and not just in the middle of a paddock somewhere,” she says.

Carnell believes there is “no doubt” fake trading scams are costing businesses money, not just via fraudulent transactions, but through reducing consumer confidence in legitimate businesses who are launching in the online space.

“For a small business legitimately trading online, you don’t want any reduction in the confidence consumers have with online traders,” she says.

Never miss a story: sign up to SmartCompany’s free daily newsletter and find our best stories on Twitter, Facebook, LinkedIn and Instagram.