Q. How do I know this online company is legitimate?

Do not give your personal information or credit card information to any website that you are not sure about.

Google the company name, URL and address to see if there have been complaints on online forums about the company or any other company at that address. For googling the URL, put quotations around it “unknownshop.com”.  Keep in mid that shady operators often post phony positive reviews or “shill” posts of their own site on forums and review sites. Pay more attention to the negative reviews.

Check the Whois information on http://www.whois.net/ for the domain of the site.
Look to see what date the domain was first registered. A website registered only in the past couple of months would be a danger sign – especially if they claim to have been in business a long time.
Look up the registered owners’ address, company name and phone at an online phone directory like 411.com to see if they have a landline at the address; also check to see if the owner’s address is phony.  If the ownership is stealthed or protected by a privacy service, thats  a potential red flag (however there are legitimate reasons for keeping registration private too.)

Look up the store name on http://www.resellerratings.com

Look up the business name or URL at the Better Business Bureau http://www.bbb.org

Click on the security certificates and badges, they should link to a verification page at the security company. If they don’t link, or if they go to a page on the sellers site, then the certificates might be phony.  Do the pages that you enter your information on have HTTPS: and the lock symbol in your browser?  Don’t enter personal or financial information on a page which is not SSL secured.

Be aware that judging the quality of products based on an online picture is particularly difficult. Read the description carefully – you will not get more than what is explicitly described.

  • What is the manufacturer’s model number (not the store’s own SKU number)
  • What exactly is included, and not included with the purchase? (if it doesn’t say that an accessory is included, don’t assume it is)
  • Is it actually new and unopened, or is it “open box” “refurbished” “re-certified” “like new” or “B-Stock” (goods that have been returned or are cosmetically defective)
  • What is the warranty?
  • Where do you have to go for warranty service?
  • Is it a manufacturer’s factory warranty, or is the warranty covered by the seller only?  Seller-only warranties indicate that the seller is not an authorized dealer, or the product is “gray-market” (imported from another country against the manufacturer’s policies)
  • Is the warranty valid in your country? Some companies disallow warranty service on goods that have been imported from another country.

Read the fine print.

  • What are the return and refund policies if the product is defective or not as described?
  • Who pays for return shipping?
  • Is there a restocking or service charge on returns?
  • Do you get a refund to your charge card or only store credit?
  • Where does the product ship from? Does the seller have their own stock, or is it provided by a “Drop Ship” wholesaler (makes delivery , quality and warranty issues harder to deal with). Out of country suppliers are particularly risky.

More info:
BBB Consumer tips: http://us.bbb.org/WWWRoot/SitePage.aspx?site=113&id=9c2460f1-4c8d-415a-a55d-2da54c5d4f40

Craigslist, Used{city}.com and kijiji are for local, face to face cash transactions only. Companies from out of town advertising products on your local classified should be suspected of trolling for people to be scammed. Individuals from other towns (or countries) offering to buy your item by mail are almost always scammers.  http://www.craigslist.org/about/scams  Do not accept online or non-cash payment for goods picked up in person.

PayPal offers buyer protection, but only in specific circumstances. There is no buyer protection for services, only for tangible goods. Never use PayPal for face to face transactions, only for shipped goods with a signature on delivery. PayPal disputes have to be filed within 45 days – do not let a seller string you along with promises past the deadline. File the dispute right away, you can always cancel the dispute if the goods show up.

For mail order goods, you should insist on shipping by courier or registered mail, with insurance and a signature on delivery. This protects you against loss or damage in transport, and is your proof that a product arrived (or didn’t arrive).  Do not send money by Western Union or other wire transfer service – despite the seller’s assurance of how safe it is, the money cannot be canceled or refunded once you send the transfer.  Western Union does not offer an escrow or delivery confirmation service, no matter what the seller may say. If the other party suggests using some unknown ‘safe’ escrow service you can be 99% sure the service isn’t safe and the object is to rip you off.

Scamadviser http://www.scamadviser.com/ is a source for reported scam sites.

Spyware Blaster blocks the URLs of known malware sites from your browser http://www.pcworld.com/downloads/file/fid,23106/description.html

McAfee Site Advisor flags websites security risks as you browse: http://www.pcworld.com/downloads/file/fid,62594-order,1-page,1/description.html

MyWOt (Web of Trust) allows you to search for reviews of particular sites http://www.mywot.com/

Hints for safe web browsing https://computer-answers.ca/2011/internet-networking/q-is-there-any-internet-security-threat-if-i-only-visit-reputable-sites/

More info on Scams

BBB Scam Source: www.bbb.org/canada/scam-source/

RCMP Scam and Fraud page: www.rcmp-grc.gc.ca/scams-fraudes/index-eng.htm

Canadian Anti-Fraud centre: www.antifraudcentre-centreantifraude.ca/english/home-eng.html

ABC Fraud quiz: www.abcfraud.ca/

Financial and investment fraud – BC Securities Commission:  www.befraudaware.ca/fraud-warning-signs?gclid=CKSr7uWFvrQCFQ_hQgodJ3IAMA

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2 Responses to Q. How do I know this online company is legitimate?

  1. Pingback: Q. I’ve been offered a job online working from home. Can I really make money working from home or filling in surveys? | CanadaRAM: Memory and Computer Q&A

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