Overstock scams luring holiday shoppers

by Eric Flack, Wave 3 NBC News

BBB-Warning-News-Rotor-ImageA trusted name in bargain hunting is being used to scam people out of money right around Christmas time. People who thought they were shopping with online discount retailer Overstock.com were really using knock off websites that took their cash and never delivered the product.

It took federal agents to shut down a slew of websites using the Overstock name to scam people out of money. Now a new round of bogus sites are popping up and could be your Christmas Grinch.

“Everybody wants a deal,” said Louisville Better Business investigator Bruce Gadansky. And millions get their deals from Overstock.com. A website that offers deep discounts on surplus inventory from about 1400 different retailers. “When folks see that name they figured they are dealing with a trustworthy organization,” Gadansky said.

In April, Gadasnky got a complaint from someone who paid $400 for a large wooden swing set from a website called Overstock-closeouts.com. The swing set never came, so Gadansky started digging and found out the website was a fake.

What’s more, it had been fraudulently set up using the identity of a man, in Radcliff. “His name was being used, his address, his phone number,” Gadansky said. “So he was getting phone calls from consumers who said where’s my merchandise? And he’s saying I don’t have any idea what you’re talking about.”

Gadansky put out an alert and immediately started hearing from other BBB offices around the country dealing with the same type of issues. “They were in Virginia, they were in Minnesota, they were in Denver,” Gadansky said. “They were everywhere.”

The BBB called in the FBI, who worked with internet service providers to shut down more than a half dozen bogus Overstock websites, including:


It’s rare anyone gets charged with a crime because the people running the sites always do it using someone else’s name.  And customers rarely get their money back because the scam sites ask people to pay with something called a green dot card. That’s a prepaid debit card that is the on line equivalent of wiring cash.

Mark Griffin, general counsel for overstock dot com, said the company has been fighting knock off sites since 2004. “We are frustrated that people would trade on our name,” Griffin said.

Griffin said the problem has gotten worse as overstock has gotten more popular. “The price of success is eternal vigilance,” Griffin said. “And we are constantly taking these things down as soon as we see them.”

So is the BBB. Gadansky said a new round of Overstock knock offs has popped up this holiday season. So the next time you’re about to click on a can’t miss deal, be sure where you’re shopping. “You have to do some homework,” Gadansky said. “You have to verify who you’re dealing with.”

The BBB suggests the following tips for online shoppers to avoid bogus websites:

  • Go to bbb.org to look up the BBB Business Reviews of your favorite online retailers.
  • Type the URL directly into your browser; do not click on a link from an email or social media site unless you are absolutely sure the message is from the legitimate business.
  • On the payment page, look for “https” at the beginning of the address (the “s” stands for “secure”).
  • Look for “Contact Us” information, including a real address, a toll-free customer service number, and other ways to reach the company if you have a problem.
  • Use a credit card (not a debit card) when shopping online for greater protections against possible fraud.