Spot and Avoid Online Marketplace Scams

Online marketplace scams cost Canadians tens of millions of dollars every year. The Canadian Anti-Fraud Centre (CAFC) consistently ranks online purchase scams among the top fraud categories by dollar loss — and the numbers have grown every year as more buying and selling moves to peer-to-peer platforms.

The frustrating reality is that most marketplace scams aren't sophisticated. They rely on urgency, distraction, and buyers who haven't seen the pattern before. Once you know what to look for, the vast majority of scam listings become obvious. This guide covers the most common scams active on Canadian marketplaces right now, the red flags that identify them, and what to do if something goes wrong.

Why Marketplace Scams Are So Common

Peer-to-peer marketplaces are attractive to scammers for straightforward reasons: low barriers to entry, high transaction volume, anonymous or semi-anonymous seller accounts, and a transactional dynamic that encourages buyers to move quickly on good listings. The same features that make marketplaces useful for legitimate buyers and sellers also make them useful for fraud.

Scammers operate at scale. A single fraudster may run dozens of fake listings simultaneously across multiple platforms. The listings are designed to look legitimate at a glance, and they're optimized to pressure buyers into acting before they have time to think. Understanding the mechanics of how scams work is the first step to not falling for them.

The Most Common Marketplace Scams in Canada

1. The Advance Payment Scam

This is the most prevalent and costly marketplace scam in Canada. The setup is straightforward: a listing appears for a high-value item — a vehicle, electronics, furniture, tools — at a price that's attractive but not implausibly low. The seller explains they're not local (moving, overseas, military deployment, working remotely) and can't meet in person. They ask for a deposit or full payment via e-transfer, wire transfer, or gift cards before the item is delivered or viewed.

The item doesn't exist. Once payment is sent, the seller disappears. E-transfer and wire transfer payments are effectively irreversible once sent — there is almost no recourse after the fact.

Red flags: Seller can't meet in person. Payment required before viewing. Unusually compelling backstory explaining the distance. Pressure to act quickly before "another buyer" claims the item.

Rule: Never send money to a private seller before physically viewing and inspecting the item. No legitimate private seller requires advance payment from a stranger.

2. The Overpayment Scam

This one targets sellers rather than buyers. A "buyer" contacts you about your listing and offers to pay by cheque — often for more than your asking price, with an explanation like "my assistant made a mistake" or "I'll pay extra for your trouble." They ask you to deposit the cheque and send back the difference via e-transfer.

The cheque is fraudulent. It will clear initially in your account due to banking hold policies, but be reversed days later when the bank processes it — leaving you out the e-transfer you already sent and potentially responsible for the full cheque amount.

Red flags: Buyer wants to pay by cheque. Overpayment with a request to return the difference. Any variation on "deposit this and send me back part of it."

Rule: Never accept cheque payment from a stranger for a marketplace transaction. Bank draft from a known financial institution only — and even then, wait for full clearance before releasing the item.

3. The Fake Escrow Scam

A buyer or seller proposes using an "escrow service" to secure the transaction — a third party that holds the payment until both sides confirm the deal. They send a link to the escrow service. The service looks professional and legitimate. It is not.

Fake escrow websites are designed specifically to impersonate legitimate services. The "escrow" holds your money and disappears, or the "buyer" claims the item never arrived and triggers a fraudulent refund. Either way, you lose.

Red flags: Any suggestion to use a third-party escrow service you weren't already familiar with. Links to escrow sites provided by the other party. Services with names that sound like legitimate financial institutions but don't check out under scrutiny.

Rule: For high-value transactions requiring escrow, use only established, verifiable Canadian financial institutions or licensed escrow services — not a link provided by the other party in a transaction.

4. The Bait and Switch

A listing advertises a specific item at a good price — a particular vehicle model, a specific electronics configuration, a name-brand tool. When you arrive to view or receive the item, it's different from what was advertised. Lower spec, different model year, damaged in a way not disclosed, or an outright different product entirely.

This happens in person and in shipping. In-person bait and switch relies on the buyer's reluctance to walk away after travelling to see the item. Shipped bait and switch relies on the difficulty of returning items and the cost of disputes.

Red flags: Listing photos that look stock or generic. Descriptions that are vague on specifics. Seller who is evasive about confirming details before you travel to view.

Rule: Confirm specifics in writing before committing to a viewing or payment. Request photos that clearly show identifying features — serial numbers, VINs, model numbers. Walk away if the item on arrival doesn't match the listing.

5. The Fake Listing on Real Platforms

Scammers copy legitimate listings — photos, descriptions, and all — and repost them at slightly lower prices. The copied listing looks authentic because the photos are of a real item. The seller has no item to sell.

This is particularly common for vehicles, where a scammer will copy an AutoTrader or Facebook Marketplace listing and post it on Craigslist or another platform at a lower price to attract motivated buyers.

Red flags: Reverse image search the listing photos — if they appear in other listings on other platforms, they've been copied. Prices that are noticeably lower than comparable listings with no explanation. Seller who can't provide additional photos on request.

Rule: Reverse image search any listing photos you're uncertain about. Right-click on listing photos and select "Search image" in Chrome, or use Google Images. A genuine seller has original photos of their actual item.

6. The Vehicle-Specific Scams

Vehicles attract a category of scams specific to the size of the transaction. Beyond the advance payment scam, the most damaging vehicle-specific frauds include:

•  Rolled-back odometers: The vehicle has more mileage than shown. A CARFAX Canada or CarProof report that shows historical odometer readings from service records will often catch this.

•  Undisclosed accident history: The vehicle has been in a significant collision that was repaired cosmetically but left structural or mechanical issues. A vehicle history report and pre-purchase inspection both help identify this.

•  Outstanding liens: The seller owes money on the vehicle to a lender. The lender's claim follows the vehicle, not the seller — meaning you can buy the car and then have it repossessed by a lender the seller never told you about. Always verify lien status through your provincial registry or the vehicle history report before purchase.

•  Curbsiders: Individuals who buy and resell salvage or problem vehicles without disclosing their status, presenting themselves as private sellers. Selling multiple vehicles in a short period without a dealer licence is illegal in most Canadian provinces. Multiple listings from the same seller, or a seller who's vague about their relationship to the vehicle, are signals.

How to Verify a Seller Before You Engage

Before investing significant time or money in a transaction, take a few minutes to verify who you're dealing with.

Check the Account History

On Facebook Marketplace, you can see when the seller's account was created and their transaction history. A brand new account with no history selling a high-value item warrants extra scrutiny. On eBay, seller feedback ratings and transaction history are public — a seller with hundreds of completed transactions and positive feedback is demonstrably different from a new account.

Search the Seller's Contact Information

If a seller provides a phone number or email, search it. Scam phone numbers and emails often appear in warning posts on Reddit (r/scams is a useful resource), consumer protection forums, or CAFC reports. A number that appears in multiple fraud reports is a clear signal.

Look for Listing Duplicates

Search the listing title or a distinctive phrase from the description in quotes on Google. If the same text appears on multiple platforms or in multiple listings, it's been copied. Legitimate sellers write original listings about their own items.

Ask Questions That Require Specific Knowledge

A genuine seller knows their item. Ask specific questions: "What colour is the interior trim?" "Is the original box included?" "What's the serial number?" Scammers working from copied listings often can't answer questions that require first-hand knowledge of the item. Evasive, vague, or inconsistent answers to specific questions are a significant red flag.

Safe Transaction Practices

Meet in Public

For in-person transactions, always meet in a public place during daylight hours. Many Canadian police services offer their parking lots specifically as designated safe exchange zones for marketplace transactions — search "safe exchange zone" with your city name to find the nearest one. For higher-value items, bring someone with you.

Payment Methods by Risk Level

•  Cash (in person, verified): Low risk for buyer, manageable risk for seller with standard precautions.

•  Bank draft / certified cheque: Appropriate for large transactions, but verify authenticity with the issuing bank before releasing goods.

•  E-transfer (in person, simultaneous): Reasonable for lower-value in-person transactions. Confirm receipt before handing over the item.

•  Wire transfer: High risk. Essentially irreversible once sent. Avoid for private marketplace transactions.

•  Gift cards as payment: Always a scam. No legitimate seller requests payment in gift cards under any circumstances.

•  Cryptocurrency: Irreversible. Only appropriate if you fully understand the implications and are comfortable with the risk.

Never Feel Pressured to Act Immediately

Urgency is a scam's most powerful tool. "Another buyer is coming tonight." "I need to sell today." "This offer expires in an hour." Legitimate sellers don't disappear if you take a day to verify a vehicle history report or arrange an inspection. If a seller's behaviour makes you feel rushed, that pressure is information. A deal that requires you to skip due diligence is not a deal worth making.

How MyBuy Helps Protect Buyers

MyBuy's AI includes fraud detection signals specifically designed to flag suspicious listings before you invest time in them. Listings where photos appear to be stock images rather than original seller photography are flagged automatically — one of the most reliable indicators of a copied or fabricated listing. Listings priced significantly below estimated market value receive a "Suspiciously Low" label that prompts closer scrutiny before engagement.

These signals don't replace due diligence — a flagged listing isn't automatically a scam, and an unflagged listing isn't automatically safe. But they surface the listings most worth examining carefully, so you're spending your attention where the risk is highest rather than evaluating every listing from scratch.

What to Do If You've Been Scammed

If you've been the victim of a marketplace scam in Canada:

•  Report it to the Canadian Anti-Fraud Centre (CAFC) at 1-888-495-8501 or antifraudcentre.ca. Reports help CAFC track patterns and warn other Canadians.

•  Report the listing and the seller account to the platform where the transaction occurred. Most platforms have formal fraud reporting processes and can disable fraudulent accounts.

•  Contact your bank immediately if you've sent an e-transfer or wire transfer. Recovery is rare but occasionally possible if reported quickly enough.

•  File a report with your local police service. A police report number is required for insurance claims and may be needed for bank fraud investigations.

•  Contact your province's consumer protection office. Provincial consumer protection legislation varies, but most provinces have formal complaint processes for online fraud.

The best protection against marketplace scams is the same as it's always been: slow down, verify, and never send money before you've seen and confirmed the item in person. The urgency is manufactured. The opportunity will still be there after you've done your due diligence — and if it isn't, it was probably a scam.

Start your search safely at mybuysearch.com.

— Ian Cameron, Co-founder & CEO, MyBuy Software Inc.