What is Product Service Scam? Definition, Detection & Protection

A product service scam happens when a scammer pretends to be a real seller or service provider to trick you into paying for something fake. This could be a fake invoice, a cloned website, or a fake online store.

These scams are hard to spot because they look like normal business transactions. They target your employees, suppliers, or finance teams—and once the money is sent, it’s often gone for good.

The impact is massive. In just the first four months of 2025, Australians reported 72,230 scams, losing over $76 million USD. In the UK, fraud is now the most common crime, with losses reaching $15.35 billion (£11.4 billion) annually. Meanwhile, Canadians lost over $461 million USD to fraud and cybercrime last year alone. (Source)

In this blog post, we’ll explain exactly what a product and service scam is, how to detect it early, what steps you can take to stop it, and how Keepnet helps protect your business from these threats.

Understanding Product Service Scams

A product service scam is a fraud where scammers trick businesses or individuals into paying for fake or non-existent goods and services. These scams often use fake invoices, cloned websites, or emails that appear to come from trusted vendors.

Criminals may impersonate suppliers, alter payment details, or set up fake online stores with attractive offers. As these scams look like routine business transactions, they often go unnoticed until it’s too late.

The impact includes financial loss, data exposure, and reputational damage. Since these attacks rely on human error, not just technology, strong detection and prevention are critical.

Common Types of Product and Service Scams

Product and service scams come in many forms, but they all aim to steal money or sensitive data. These scams often mimic legitimate business activity, making them hard to spot at first glance. Attackers rely on trust, urgency, and routine workflows to slip past defenses. Let’s dive into the most common types and how they operate.

1. Fake Invoices

Scammers send professional-looking invoices that appear to come from trusted vendors or service providers. These invoices often include realistic branding, reference numbers, and formatting—making them hard to distinguish from real ones. The scammer changes the bank account details so the payment goes directly to them.

Victims often realize too late, usually after the money is unrecoverable. This tactic is especially effective when finance teams are busy or when payment processes aren’t double-checked.

For tailored strategies to help finance teams spot and stop fake invoice scams, read the Keepnet article on Security Awareness for Finance Roles.

2. Cloned Websites

Cybercriminals often set up fake websites that look almost identical to trusted brands, copying their design, logos, and product listings. These fraudulent sites typically promote limited-time deals or heavily discounted items to trick users into making quick purchases. In many cases, customers either receive fake products or nothing at all. Beyond lost payments, these sites are also used to steal credit card numbers and personal data during the checkout process.

Cloned websites are especially common during shopping seasons, when consumers are less cautious. Look for subtle domain name changes, lack of company contact details, and poor-quality text—these are key indicators that the site isn't real.

3. Supplier Impersonation

Attackers pretend to be legitimate vendors your business already works with and request changes to payment details—usually citing urgency or a recent system update. These requests often come through email and may use lookalike domains or spoofed addresses to appear authentic. Once the banking information is updated, future payments are silently redirected to the scammer’s account.

This scam often goes unnoticed until the real supplier follows up on a missed payment. Regular supplier communication and verification protocols are essential to prevent such fraud.

4. Online Store Scams

Scammers create fake e-commerce websites or social media pages that offer popular or high-demand products at prices that seem too good to be true. These stores often have polished designs, fake reviews, and even stolen trust badges to appear legitimate. After payment, the product is either never delivered or is a cheap counterfeit. Victims usually discover the scam only after the store disappears or stops responding.

These scams often spike during holidays or sales seasons, preying on urgency and impulsive buying. Always research unfamiliar stores, check domain age, and avoid payment methods like wire transfers or crypto.

For practical steps to shop safely online, explore our article on 12 Essential Cyber Security Tips for Safe Online Shopping During the Holidays.

5. Subscription and Trial Scams

Scammers lure users with free trials of products or services, often requiring credit card details upfront. While the offer appears risk-free, hidden terms trigger automatic renewals or recurring charges that are hard to cancel. Victims often don’t realize they’ve been charged until they see it on their bank statement.

These scams usually avoid providing clear cancellation instructions or bury them in fine print. Some even disguise the transaction under vague billing names to delay detection. To avoid falling into these traps, carefully review the terms and keep a close eye on billing activity.

These scams exploit trust and routine business operations, making them challenging to detect without vigilant verification processes and employee awareness.

Detection: Spotting Product Service Scams Early

These scams don’t rely on malware or hacking-they rely on human decisions. A fake invoice, a slight change in bank details, or a realistic-looking website can all pass unnoticed during busy workflows. That’s why detecting product and service scams early means embedding small but effective checks into your everyday operations. The table below outlines the most effective methods and what signs to watch for.

Table 1: Key Detection Methods for Product and Service Scams

These detection methods help your team recognize scams before they lead to financial or reputational loss. It’s not just about spotting fraud-it’s about stopping it before it happens.

Protection: Stopping Scams Before They Hit

Prevention is more effective and less costly than recovering from a scam. Once money is sent or sensitive data is exposed, it’s often too late. To stay ahead, businesses must build in safeguards that block scam attempts before they reach employees or systems.

• Verify Payment Requests Manually: Always confirm changes in bank details or urgent payment instructions through a trusted phone number or face-to-face, not by replying to the same email.
• Use Dual Authorization for Payments: Require two sets of approvals for high-value transactions or supplier updates to prevent single-point errors.
• Deploy Email Threat Simulators: Test your team’s readiness with tools like phishing and invoice scam simulations to identify weak spots.
• Secure Your Vendor List: Maintain an approved vendor list and limit who can add or modify it within your procurement systems.
• Monitor Employee Behavior Trends: Track risky actions like clicking suspicious links or downloading attachments using a human risk scoring system.
• Train Continuously, Not Just Annually: Run short, frequent awareness sessions to keep scam tactics fresh in employees’ minds.
• Integrate Real-Time Threat Intelligence: Use updated threat feeds to flag suspicious emails, domains, or payment destinations before any action is taken.

Stopping scams means reducing the chance for human error and adding friction where fraud usually slips through. Prevention works best when technology and policy reinforce each other.

Real Example: How Fake Sales Sites Drained £450M

In 2024, the UK saw a major rise in international payment scams. Criminals tricked people into sending money abroad by posing as legitimate online sellers. These scams looked like normal purchases, but the money went straight to fraudsters.

UK Finance reported that while APP (authorised push payment) scam cases dropped by 20%, total losses still hit £450 million.

A key tactic was fake sales websites offering high-value items like electronics and gym equipment at low prices. Victims were asked to enter a one-time bank passcode, which the scammers used to complete the theft. No products were delivered—and the funds were gone.

Since international transfers aren’t covered by the UK’s refund rules, most victims couldn’t recover their losses. This case shows how product and service scams are evolving, and why early detection and strong prevention matter (Source).

How Keepnet Addresses Product and Service Scams

Product and service scams rely on human error—misreading an invoice, trusting a fake supplier, or clicking the wrong link. Keepnet tackles these threats at the source: your people. Through targeted simulations, adaptive training, and rapid threat response, Keepnet equips your workforce to spot scams early and shut them down fast.

• Phishing Simulator mirrors real scam tactics like fake invoices and supplier impersonation — using 6,000+ templates across email, SMS, voice, QR, and MFA channels.
• Risky user actions trigger instant micro-training, reinforcing awareness and improving response with every simulation.
• Security Awareness Training delivers role-based, compliance-ready content in 36+ languages, ensuring every employee is equipped to spot and stop scams.
• Incident Responder analyzes phishing emails 48.6 times faster, enabling quick action before threats spread.

These tools don’t just stop threats — they build strong security habits and a culture of awareness across your workforce. Check out Keepnet’s free phishing simulation test and security awareness training to start building those habits today.

Read our guide to learn more about phishing scam examples.