Experts say a popular scam known as brand ambassador or influencer scams are targeting users who are active on social media.
“The prevalence of this is so much bigger than I even realized,” said Erica James, a social media influencer marketing expert based in California.
Online, Erica James is known as Erica Daily. She’s the CEO and founder of The Daily Influencers, a blog and company that helps brands increase their revenue and market share through influencer marketing.
James said when it comes to ambassador scams, companies will reach out asking people to direct message them if they are interested in becoming a brand ambassador.
She added that the company claims all the job requires is for the person to post a picture or video of themselves using or wearing the product, in exchange for a commission or discount, free product or exposure to gain followers.
“As an influencer, you get excited, especially if you’re wanting to start and a brand wants to work with you and they comment on your post,” James said.
“But the game is that they send (messages) to as many people as they can, a small percentage will fall for it and that’s where they make their money.”
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In Regina, Kara Halbgewachs has been capturing photos of her children and posting them on Instagram for two years now.
Her son Hunter and daughter Hadlee are both brand ambassadors for several businesses. But she said when she started out, she, too, was the victim of a scam after a company reached out and commented on one of her photos, asking her to direct message them.
“I did DM once because at the time I wasn’t sure,” Halbgewachs said. “The one shop had just opened up and claimed I would get a free shirt if I paid for shipping.
“They said they would send it out right away and then two weeks later it’s like, ‘Oh yeah, it’s coming,’ and then another two weeks later and you’re like, ‘OK, it’s been a month.”
Halbgewachs said she eventually filed a claim and got her money back.
The scam has caught the attention of the Better Business Bureau. According to the BBB Scam Tracker, several victims first reported buying items from sunglasses to jewelry and cosmetics.
In some cases, the BBB said the items cost around $50 or more and in some instances arrived broken or unusable.
But no matter how the scam worked, the BBB said the outcome was the same. Victims paid upfront with the promise of a commission or exposure, which never materialized and instead said the “brand ambassadors” ended up losing money.
“As an influencer, you’re putting in a lot of work to promote a brand and you absolutely deserve to be paid for that, so whenever a brand is asking you to pay, whether it’s just to pay for shipping, or pay a discount on a product, I always say don’t do it. It’s not anything you want to be involved in,” James said.
“If anything a brand should give you a product for free in exchange for collaborating with them.”
In Canada, April Moon Boutique is one company raising red flags and actively seeking brand ambassadors.
Although Halbgewachs does not claim April Moon scammed her, she does say, “every picture you post, there is someone from April Moon being like, ‘DM us to join our team,'” Halbgewachs said.
“I’ve gotten to the point where I’ve had to block them as they comment.”
On its website, April Moon claims to be Canadian owned and operated. While its address traces back to a P.O. box in New Brunswick, the BBB Atlantic told Global News in an e-mail that April Moon is not legally operating.
“To operate legally in New Brunswick they need to be registered. They were never registered,” said the BBB serving the Atlantic provinces.
The BBB also told Global News that since January 2020, April Moon has received 46 complaints, the third highest number in the territory. The complaints range from orders never received to poor quality and fit.
Although the BBB said complaints have dropped off in the last two months, the BBB has issued an alert and rated the company an F.
April Moon also claims to donate a portion of its proceeds to Crossroads for Women, a New Brunswick charity. However, its executive director confirmed to Global News it has not received any funds in at least two years.
April Moon would not answer any direct questions, but told Global News, “it’s unfortunate that the internet doesn’t offer companies much protection from slander. Anyone can write anything they want online but that doesn’t mean it’s true or fair or the full picture.”
The company went on to say, “we encourage you to see all of our tagged photos and our hashtags and even reach out to some people who have posted about us on Instagram and ask them how their experience was before you make your choice. The negative comments are loud and we understand that, but the positive always seems to get overlooked.”
If you have concerns with April Moon or a Shopify website feel free to contact us below.
One cybersecurity expert Global News spoke with said while the April Moon website does raise a number of concerns, with the explosion of online businesses, it’s easy to appear legitimate.
“What that does is delegitimize the entire process and creates trust issues. ‘How can I trust going online and purchase something when there are all these scams out there,'” said Ritesh Kotak, a cyber and technology analyst.
“In this case in particular, we found there were some questionable online reviews there was no phone number to contact the company and even when you look at some of the complaints that were filed- they said ‘I didn’t receive the product’ and this wasn’t just one complaint, these were numerous complaints.”
Kotak also pointed out that the April Moon website was made with Shopify, a Canadian commerce platform that allows people to set up an online store and sell their products.
“Shopify is great because it has built-in security, it’s relatively simple… They also have a built-in fraud detection, which is a plus for companies,” Kotak said.
“On the flip side of this, is just because it’s so easy there is a lack of a verification process. This means that companies now can leverage their platform to quickly come online, purchase something and when the complaints start coming in, they roll up and shut down.”
While Kotak said it’s not a knock on any of these platforms, he said there needs to be a better mechanism in place for when these sites are detected to allow people to contact platforms like Shopify and have them investigate as well.
In a statement to Global News, Shopify said: “Shopify believes in making commerce better for everyone, and we take concerns around the goods and services made available by merchants on our platform very seriously. We have multiple teams who handle potential violations of Shopify’s Acceptable Use Policy, notices of alleged copyright and trademark infringement, as well as fraud complaints. Shopify’s Acceptable Use Policy (AUP) clearly outlines the activities that are not permitted on our platform, and we take action to investigate and close shops when necessary.”
As for James, she said the best advice for brand ambassadors starting out is to pitch to companies you know and connect with other influencers.
When it comes to red flags, James said in addition to companies commenting on photos to DM them, other things to watch out for are buying the product upfront, if the companies bio said DM to collab, or you’ve never heard of the brand.