Dangerous Game: Don't Fall for PS4, Xbox One Scams

By/Erik Sherman Nothing like getting a bargain in your holiday shopping, and no place like online to get it. Only, in the frenetic quest to find the right things for the right people, you could find yourself on the bad end of a scam.

Nothing like getting a bargain in your holiday shopping, and no place like online to get it. Only, in the frenetic quest to find the right things for the right people, you could find yourself on the bad end of a scam.

Take finding a fantastic deal on one of the coveted new video game consoles, an Xbox One from Microsoft (MSFT) or Sony PlayStation 4, at a great price. Trouble is, many of the listings you might see are utterly bogus. And not just a bait-and-switch, but outright fraud.

According to brand protection consultancy NetNames, at last count there were nearly 100,000 online scams on Asian marketplace sites such as Alibaba, Taobao and ECPlaza for either the PS4 or Xbox One. Many had guaranteed product availability and offered wholesale lots of upwards of 5,000 units before Microsoft and Sony were set to ship. Payment was typically to be through PayPal, Western Union or bank transfer.

The advertised prices were, not surprisingly, insanely good. The consoles were offered at $300 each, with free shipping anywhere in the world. Buy 50 gaming consoles and get them for $200 each.

Any of these offers should have raised ref flags. Both Sony and Microsoft keep tight control over the distribution of their products, working through authorized dealers, and neither is deeply discounting at this stage, particularly as margins are thin and manufacturers see little to no profit on sales. Indeed, the consoles are loss-leaders for additional hardware and game titles, in which the console companies make royalties.

Because of product counterfeiting, in many cities you can buy faux designer goods on street corners. Perhaps consumers are aware that $25 is not enough to purchase a real Coach bag unless the merchandise is stolen. At least there's a physical product, no matter how badly made.

But online you aren't even assured of that. So here are some tips to avoid getting scammed:

  • If the deal is too good to believe, pass it up.
  • Buy only with a credit card because, in the U.S., you are afforded significant protections. Even a debit card won't match up. Transferring money is asking to be fleeced.
  • Ask the manufacturer whether the seller is authorized to handle the product.
  • Check the retailer's reputation online. Search for its name and the word "reviews." If there is something off, you're likely to hear it.
  • If the offer lands as part of a mass email campaign, ignore it unless you recognize the organization that sent it. Even then, don't click on links. Go directly to the company's site and look for the special.
It's better to pay more than to lose everything you spent.
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