What is Bait and Switch Scams: How it Works and How to Avoid It
Table of Contents
- By Steven
- Published: Apr 05, 2024
- Last Updated: Apr 10, 2024
Ever follow an ad featuring limited-time products to a company’s web page only to find they’re selling something else entirely? Or have you added a product to a cart only to discover a laundry list of issues, from poor quality to endless fees? Bait and switch (also called “bait-and-switch” or “B&S”) is a classification of fraudulent activities that most recognize as false advertising.
Bait and switch scams tactics are crucial for consumers to understand and learn to identify. Understanding these potentials can save a person from disclosing their sensitive information to a malicious group, one that’s already trying to defraud them. Identifying common elements can help raise alarms for suspicious activity. For example, if a customer service representative is overly aggressive, concerned with payment details early on, or seems to ignore or avoid questions.
Identifying the signs and potential consequences of bait and switch fraud is vital for modern consumers. Knowing the indicators can help save the individual more than money in the short term; it can also help dissuade identity and financial fraud and contribute to the overall safety of our families and those online.
What Is Bait and Switch?
To better emphasize the passages above, bait and switch is a type of financial fraud, and when organizations commit it, the practice is called false advertising. The scam works by luring a potential victim in, then “switching” elements of their order; this can mean switching a product for an inferior option, refusing to deliver the promised goods, or jacking up prices with hidden fees.
The history of bait and switch has been alive since widespread bazaars. What was once savvy business owners using a sleight of hand to save their most attractive products (e.g., a fresh apple versus an older or damaged one) has now become a significant foothold in recovering otherwise lost revenues. Of course, this is only true for corporations that purposely mislead their clients, as lone threat actors may never intend to provide services or products that a victim has purchased.
Lone assailants (and their posse) don’t often pull bait-and-switch schemes; they typically target other cyber crimes with higher payouts or profitability. However, this doesn’t mean the public is safe from threat actors. Corporations are known for shoddy business practices and vague contract language, rendering consumers mostly defenseless if they fall for a purchase; threatening groups, on the other hand, may have various channels to commit bait-and-switch fraud.
The most common tactic for a threat actor to lure potential victims is adverts, like the ones that line blog posts and social media feeds. Clicking on the wrong one can infect a device with invisible threats and line up the victim for a bait and switch via a convincing fake online shopping website. These decoy websites can range in style from promising niche, eclectic products that never come to duplicating the biggest websites in the world, or at least their sign-in pages.
Moreover, anyone can fall victim to a bait-and-switch scam; however, knowing the signs can make the difference between a lasting jurisdiction battle with potential financial ruin and a mitigated disaster. There is much to know about bait and switch scam, like how to respond to it and its potential legal ramifications, but the most essential information is its mechanics.
The Mechanics of Bait and Switch Scams
Below are some of the mechanisms involved in Bait and Switch scams:
The Lure
As mentioned above, “the lure” of a bait and switch scam is anything that might entice a potential victim into interaction. These are usually attractive offers meant to grab the attention of particular people and align the consumer to be later defrauded, tricked, or victimized. Lures can take many forms, challenging their potential victims’ critical thinking, cybersecurity attitudes, detail orientation, and caution.
- Some organizations offer free services for new accounts or “teaser” prices and promotional items; in bait and switch, hidden fees surround these lower prices, often more than making up the difference in cost.
- Other companies could advertise specific items and services at high-quality costs; for example, some fish can be sold at high cost, regardless of whether the species is considered valuable. The advertisement only needs to indicate savings.
- However, not all lures can generate instant revenue growth. Some solo actors, for example, may impersonate headhunters, posting fake job descriptions to collect consumer information for later use.
The Deception
After drawing in an unsuspecting consumer with a lure, the “switch” happens. These switches can be deceptively simple but rely on the consumer not noticing or openly accepting a less advantageous product or service. The switch can happen when a lure is engaged or when speaking with representatives about a late (i.e., never sent) product.
- Suppose a consumer is lured to a product following an irresistible deal for a limited item, but upon finalizing the purchase, they are told the limited item is out of stock. In a bait-and-switch scam, the salesperson might encourage the consumer to buy a different product—for a higher price.
- Other companies might betray their consumers, promising free items or services as lures before announcing the promotion was only for the first few people. Bait and switch schemes like this utilize the sunk cost fallacy to ensure driving revenues. The fallacy supposes that if a person spends significant time and money chasing something, they are less likely to let it go when things go awry, so they purchase the previously advertised “free” items.
- Threat actors may notice an isolated senior or downtrodden individual and begin making designs. They could create fake accounts and send the potential victim congratulations for winning a lottery, a car, or something else the potential victim would need. After taking the lure, the malicious actor can demand fees or “shipping” payments to collect the supposed winnings; such is the structure of PayPal scams worldwide.
Beyond Products and Services
Bait and switch scams are dangerous for many reasons. They mainly involve a potential victim losing money or being given an inferior product. They can also lead to reoccurring losses, more serious scams, identity theft, and fraud. The risks only increase when the scam is committed online rather than in person or in-store.
An estimated 20% of retail sales are online, from planning to final transaction. Bait and switch scams are one-way shoddy corporations, and threat actors, can take advantage of these shoppers—particularly if they lead with sales and high-quality images. Some malicious groups might cut and copy images from authentic products and use them as a facade; they only need one person to click on the advert to release infections on a device or start invisible downloads. Even worse, if the potential victim doesn’t notice differences between the advert and the actual listing, they might hand over their private information. It’s easy for a scammer to obtain a person’s full name and contact data—not to mention their payment preferences.
Is Bait and Switch Illegal?
In 1946, Congress enacted the “Lanham Act.” The act protects trademark owners from others using their patents and marks to encourage consumer “confusion” (i.e., derive sales), or if others would use the patents and marks to “dilute” (i.e., steal the niche clients) the owner’s market share. The Lanham Act prohibits corporations from offering services or items with specific details (i.e., at a certain price, quantity, or quality) unless they intend to follow through. When any of these crimes occur—through planning or by accident—it is considered false advertising and is illegal.
Where judicial punishments are concerned, if found guilty of false advertisement, a lone individual may have fines up to $5,000, imprisonment up to six months, and an overall misdemeanor charge; meanwhile, corporations may have fines up to $40,000 and imprisonment terms up to a year for participating individuals. Of course, many nuances to civil cases can contribute to differing sentences (i.e., geolocation and state laws, repeating criminal activities, or situational elements like extortion or armed duress).
Reporting Scams
There are many types of consumer fraud, so it can be challenging to discern who to talk to about a specific situation. Where bait and switch scams (or false advertising) are concerned, individuals should notify specific agencies.
- The Federal Trade Commission: The FTC oversees and enforces laws regarding false advertising and many types of fraud and scams. It has an accessible online form, and once filled out, an agent will contact the potential victim with further questions.
- Consumer Protection Offices: Depending on where the potential victim lives, their local consumer officers can help bring bait and switch criminals to justice. They can use usa.gov’s office finder to locate the closest one.
- The State Attorney General’s Office: If the FTC and CPOs aren’t enough, potential victims can also file a complaint with their attorney general, although the overall process may be slower. Use the National Association of Attorney Generals to locate your specific general’s website to place a complaint.
Strategies to Avoid Bait and Switch Scams
Bait and switch scams are dangerous, but they have recognizable elements. These indicators make most people second-guess their choice just before committing to it. For example, unprofessional, pushy, aggressive, or question-avoiding sales representatives may indicate something suspicious is happening—specifically because ordinary people don’t act that way, even if they work for a commission. Other indicators may include:
- A mix of high and low-quality images, mainly if the high-quality image is first.
- If an advert or link redirects to unknown websites to finish the transaction.
- If a product or service offer is too good to be true (it usually is).
- If additional or hidden fees are tacked onto a “final price” before payment.
Vigilance and Research
Most bait-and-switch scams fail when potential victims take the time to verify the offer made to them (and read the fine print). They may avoid these malicious traps if they use caution when speaking with representatives and conducting research before committing to a purchase.
However, verifying the legitimacy of offers can be a double-edged sword. Consumers may spend so much time verifying the offer in front of them that if they find an offer with uniquely attractive options (i.e., low prices, unique edition, promotional sales kit, etc.), they could inadvertently fall for a bait and switch - excited and blinded by the potential. If the product or service cannot be easily and immediately verified, consider returning later to review options. Don’t accept being pressured into purchasing without knowing all the options available.
Protecting Personal Information
Of course, falling victim to scams is only one potential hazard in our online lives. Safeguarding personal and financial information online is among our most vital actions. Concerning identity theft due to scams, potential victims must be extremely cautious when giving others personal details. A transaction may need a payment method, but this doesn’t mean they need your bank account—nor do these e-commerce platforms need a driver’s license or Social Security Number. Consumers can protect their identity by thinking twice before giving away their credentials, contact data, or answers to security questions (even for other accounts).
Consumer Rights and Protection
Consumers have rights when facing bait-and-switch schemes. They have the right to back out of a purchase, as long as goods haven’t been rendered; to request additional time before making final determinations; to engage authorities or lawyers when threatened; to renege on verbal agreements or change their mind about purchasing a product; to shop without the threat of fraudulent activities via online or in-person stores. However, these are not passive rights—the potential victim must act to see these rights rendered.
Reporting these and other scams is essential to restrict their influence; complaints alert professionals, which influences websites and ultimately impacts the entire security of the consumer environment. It’s often not enough to recognize a bait-and-switch scam and ignore it; others may still fall for the lure. Moreover, the rights granted to a consumer are vulnerable without an additional complaint history; the more consumers report these activities, the more likely we can bring threat actors and shady companies to justice.
Engaging with scams is part of our society’s existence online; there will always be those who attempt to deceive and steal from the public. However, if the public learns to identify and respond to these threats, we can foster a safer consumer environment.
Want to learn more about the threats we face in our digital society? Check out our other articles, including identifying and avoiding social engineering, the consequences of side-channel attacks, creating an incident response plan, and much more.
