Bank issues warning to people shopping for online bargains in the New Year sales

Linda Howard
·3-min read

January sales bargain hunters are being warned by a bank to watch out for dodgy retailers claiming to offer big online discounts. The number of rogue retailers identified by Lloyds Banking Group in January 2024 was 140 per cent higher than the normal monthly average across the year, suggesting that criminals are targeting people keen to snap up a post-Christmas bargain in the New Year sales.

Rogue retailers deceive shoppers into making purchases by creating fake websites, made to look like popular high-street brands, but after shoppers have made the purchase, the fraudster pockets the cash without sending the item. The scam can cause credit card transaction disputes to peak in January, with Lloyds seeing a 40 per cent increase in disputes in January 2024, compared to the normal monthly average.

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Lloyds said that scammers may also offer heavily-discounted goods via social media. Clothing tends to be the most common item purchased from rogue retailers, followed by jewellery.

The bank said rogue retailer scams have cost £8.5 million between January and November 2024, based on the group’s own credit and debit card customer data. Lloyds established an industry working group, working with payments companies to protect shoppers by reporting and blocking transactions with known fake websites.

Gavin Evans, senior manager for consumer cards at Lloyds, said: “The January sales can be a good time to grab bargains, but it’s also a popular time for rogue retailers, who try to scam unsuspecting shoppers and pocket their hard-earned cash.

“To avoid being caught out, check the web address before making a purchase to ensure that it is legitimate and matches the shop you’re looking to buy from, especially if you opened the website by clicking on an advert or social media post.

“Remember that if something appears too good to be true, it usually is. If you’re ever unsure, consider buying from somewhere you trust instead.”

Protect your cash in the January sales

Mr Evans shared four key tips to ensure you don’t lose money snapping up a bargain.

  • Contact the retailer - first, try contacting the retailer directly to explain what has happened and request a refund.

  • Contact your bank - if the retailer doesn’t respond or refuses to refund you, report the transaction to your bank. Most banks, including Lloyds, allow you to report transactions online in your mobile banking app. Your bank will then do the rest, usually raising a chargeback claim to potentially recover your money. For example, you can do this in the Lloyds app by tapping the transaction you wish to dispute, selecting ‘help with this transaction’ and following the steps on screen to raise a dispute.

  • Raising a chargeback claim - if you used a Mastercard, Visa or American Express credit or debit card to make the purchase, you may be able ask your bank to file a chargeback claim. To do this, you’ll need to provide your bank with the details of the transaction you’re disputing (including the retailer’s name, date of the transaction and the amount), and a description of what went wrong with the item you ordered.

  • Raising a Section 75 claim - if a chargeback doesn’t work, and you made the purchase using your credit card, you may be able to make a Section 75 claim. Your bank will be able to guide you through what you need to do to make a Section 75 claim. Note there are some circumstances where Section 75 doesn’t apply - for example, the item must have cost over £100 and up to £30,000 to be eligible.

In addition to Mr Evans’s tips, new rules came into force last Autumn requiring banks to reimburse people who are tricked into transferring money directly to a fraudster. The authorised push payment (APP) scam rules are overseen by the Payment Systems Regulator (PSR).

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