Philippines emerges as centre of Asia online shopping scams

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James Relativo thought he had landed a great deal on an electric drum set, but instead the Manila resident was cheated out of his money in a country gaining the dubious distinction as Asia’s worst for online sales scams.

Shoppers across the Philippines have been defrauded out of millions of dollars so far this year, with some turning to victim chat groups on Facebook and other social media. A recent report found more than one-third of Filipinos surveyed had been scammed or had encountered retail fraud online.

“Some people easily believe in false promises even if they are too good to be true,” warned Alexander Ramos, executive director of the Cybercrime Investigation and Coordinating Center.

In retrospect, Relativo might have been more sceptical about a drum set going for 8,000 pesos ($140), less than half the usual price, on ecommerce site Shopee.

But he hit “buy” without hesitating, and soon things turned suspicious. The seller shifted communications to a messaging app and demanded half the cost of the drums for “refundable taxes”.

More money demands followed until a frustrated Relativo agreed to bypass Shopee’s payment system and settle his remaining balance on GCash, a digital payments platform. He never got his drums.

“I just kept telling him I wanted my money back,” Relativo told Nikkei Asia. “It wasn’t like I was dealing with a scammer — he was talking to me, sending me pictures of the drum set being packed.”

The journalist’s saga highlights a bitter experience for a growing number of people in the Philippines, which clocked the highest scam rate for online shoppers across nearly a dozen economies in the 2023 Asia Scam Report, published in November.

Commissioned by the Global Anti-Scam Alliance and Taiwan-based tech security company Gogolook, the report surveyed 20,000 respondents about their online shopping experiences in Vietnam, China, Thailand, Hong Kong, Taiwan, Indonesia, South Korea, Japan, Malaysia, Singapore and the Philippines.

The shopping scam rate in the Philippines led the group at 35.9 per cent, followed by mainland China at 27.2 per cent. South Korea had the lowest incidence, at 4.2 per cent.

The explosion in online shopping has created a lucrative market for scammers. And a lack of cyber crime awareness is aggravating the problem in the Philippines, where people spend an average of 10 hours a day online by some estimates.

“Although (Filipinos) are considered very connected and digitally wired, (they) do not have adequate digital literacy skills,” said Mark Manantan, director of cyber security and critical technologies at the Pacific Forum in Hawaii.

The survey found that Filipinos were easy prey for scammers because they “respond too quickly” to sellers’ demands.

Police data shows Filipinos collectively lost more than $2.8mn in shopping scams during the first nine months of this year, a number that is sure to rise as the Roman Catholic country gears up for the holidays.

Cyber crime groups will “exploit the excitement of Filipinos in merrymaking as Christmas shopping and parties are in full swing”, Manantan said.

Despite the dangers, Filipinos tend to believe in their ability to recognise scams, according to the survey, which ranked the country third in the confidence category, behind first-placed Indonesia and second-placed China.

But that certainty about sniffing out fraud doesn’t mean “the Philippines has comprehensive anti-fraud education and preventive measures in place”, said Mel Migrino, head of Gogolook in the Philippines. “With the introduction of various technologies and the gradual digitalisation of financial services, people should not be overly confident.”

Targeting buyers through text messages was the top method for fraud, Migrino said. But sales scams also took place on social media, through email, and over landline telephones.

In recent weeks, the online group Scammer Alert PH has been buzzing with activity as members offer up their bad experiences in an attempt to warn others.

One irate shopper complained that she ordered two pairs of athletic shoes from an online seller but received “two boxes with pieces of carton and a microphone stand”.

Another member said the leather seat cover she ordered turned out to be made of cloth. “Is there any possibility to send back their fake seat cover and get my money back?” her post asked.

For Relativo, there’s no hope of getting his money back after the drum-kit seller who scammed him was banned from Shopee for ripping off other shoppers.

His pleas for a refund were ignored, leaving him empty-handed and, as he confessed, “sobbing”. “My journalist salary isn’t exactly king-size,” he said.

A version of this article was first published by Nikkei Asia on December 18. ©2023 Nikkei Inc. All rights reserved.

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