Anita Sreenivasan, a senior research associate at the Center for Cyber Security at Georgetown University, has been analyzing the types of online scams being performed by some of the biggest players in the beauty industry.
Sreenivasan says these online scams are a direct reflection of the changing face of the beauty market, which has seen a number of new trends, like online shopping and social media, in recent years.
In addition, she says the growth of beauty-related platforms like Amazon, Facebook, Snapchat, and Instagram has made it easier for consumers to buy and sell products online.
But, she adds, these online retailers have yet to come up with any effective ways to prevent or detect these types of frauds.
Sranivasan points out that some of these online sellers are also using bots to deliver a fake product to unsuspecting customers.
The bot is often a clone of a real product.
She says the bot often looks and acts a little like a human customer service representative, and that customers are often lured to a page that is often not in fact the seller’s site.
It is difficult to know how many people are actually buying these products, since they can be bought and sold for hundreds of dollars online.
“It’s not just fake products,” Sreeniva says.
“You’re looking at hundreds of thousands of dollars worth of fake products that are sold for tens of thousands.”
Sreeni is also concerned that beauty brands are not being properly trained about online fraud.
“They’re not using the tools they need to make sure that they have the proper training,” she says.
In an email to CNBC, the beauty brand Good Housekeeping said, “We are working with our customers to make our online marketing more effective and more accurate, and we have a long history of working with law enforcement to help protect consumers.”
Beauty brands can make money selling beauty products online, but they don’t have to be so focused on keeping the customer’s identity secret.
Srinivasan believes beauty brands should be more proactive in their training programs.
“We’re all learning from each other and we need to be doing more,” she adds.