Every online shopper knows the feeling—you spot an incredible deal or a limited-time offer that seems almost too good to pass up. But sometimes, what starts as a promising opportunity can quickly turn into a frustrating—and costly—lesson in digital deception.

A bait-and-switch scam can catch even the savviest shoppers off guard. In this guide, you’ll discover how this type of scam works, what warning signs to watch out for, and what legal protections may be available if you encounter one. We’ll also share practical steps you can take to safeguard your payment information.

What Is a Bait-and-Switch Scam and How Does It Work?

A bait-and-switch is a deceptive sales practice where a merchant advertises an attractive offer to lure you in, but when you try to buy the product, they pressure you into purchasing a more expensive or lower-quality alternative.

As the name suggests, this type of scam typically unfolds in two main stages:

1. The bait—The seller offers a deal that’s too good to be true, such as a popular product at a price significantly below market value or a service with unusually favorable terms. These offers are often heavily advertised in an attempt to draw substantial interest from potential buyers.
2. The switch—Once you engage with the offer or proceed to checkout, you might discover that the advertised product is unavailable, out of stock, or not as described. At this point, the seller will attempt to sell you a less favorable product or change the terms of the offer, such as by adding mandatory hidden fees.

Bait-and-switch fraud exploits the psychological phenomenon of the sunk-cost fallacy. This is when you might feel compelled to proceed with a purchase because you’ve already invested time or effort pursuing the original offer, rather than walk away empty-handed.

In a true bait-and-switch scam, the seller generally has no intention of providing the advertised offer in the first place. They use the offer solely to generate interest and foot traffic to their scam. This tactic is distinct from legitimate promotions where limited quantities or time-bound offers are clearly disclosed to consumers.

Common Bait-and-Switch Scam Examples

Bait-and-switch scams are not limited to any single industry—they can occur in retail, online marketplaces, real estate, financial services, and even digital products.

These scams particularly thrive in online shopping environments, where the fine print is easily hidden and offers can be changed with a click. Below are some examples of a bait-and-switch scam you might encounter:

1. Fake discounts in e-commerce
2. Free trial subscription traps
3. Hotel deals that turn into pricey surprises

Fake Discounts in E-Commerce

A common example of bait-and-switch fraud in e-commerce is when you come across high-demand listings at unbelievable price cuts, such as a luxury designer bag or a popular smartphone for 70% off. The photos look professional, there are plenty of (possibly fake) glowing reviews, and a countdown timer that warns you the deal is about to expire.

Here's what usually happens when you reach checkout:

• The seller claims the original product is "out of stock" but offers an upgraded one (for extra money, of course).
• Even if you authorize the purchase, you might receive something that looks nothing like the photos—cheap materials, wrong colors, or completely different items.
• When you lodge a complaint, you get the standard runaround about returns and refunds.

These scams pop up frequently on marketplace platforms where sellers can quickly open and close shops, such as Amazon and eBay.

"Free Trial" Subscription Traps

People love trying something for free, and unfortunately, some shady apps and services take advantage of this temptation. They typically begin by asking you to sign up for a “7-day free trial,” requiring only an email address and payment details to activate.

However, once you're in, you discover the "free" version is severely limited, and most features are locked behind a paywall. You might also come across constant pop-ups with special offers to upgrade at a much higher price than initially advertised.

Even if you decide not to upgrade, these services might make cancellation so difficult that you might end up paying for a subscription you don’t intend to keep. For example, they may deliberately hide the "cancel" button three menus deep in your account settings, and customer service might take weeks to respond to your refund request.

Hotel Deals That Turn Into Pricey Surprises

The travel industry has perfected bait-and-switch fraud tactics across the board, from hotel and flight bookings to car rentals and vacation packages.

One common example is searching for hotel deals online. You might find a gorgeous beachfront property listed at half the usual rate, with the photos showing sparkling pools and luxurious rooms.

But when you try to actually book it, the “switch” can happen in various ways:

• After selecting your dates, you're informed that the advertised room is "no longer available" but a "superior room" is available for a significantly higher price.
• The booking page suggests that many other guests also upgraded to this new room, with pressure that only a couple of them remain.
• The final price includes newly revealed "resort fees," "tourism charges," and other mandatory add-ons that weren't included in the initial offering.
• Even if you’re able to book the originally advertised room, it turns out to be significantly less desirable and nothing like the photos shown.

How To Recognize a Potential Bait-and-Switch Scam

Bait-and-switch scams often work because they catch you off guard. But once you know what to look for, the warning signs become much easier to spot. Here’s how to recognize the red flags before you hand over your money or personal information:

Legal Protections Against Bait-and-Switch Fraud

The Federal Trade Commission (FTC) clearly highlights that bait-and-switch scams are considered unfair or deceptive trade practices^[1]. Section 5(a) of the FTC Act^[2] prohibits businesses from advertising products/services without a genuine intention to sell them as advertised, or disparaging the advertised product in order to switch customers to a more expensive alternative.

These scams also violate Section 43 of the Lanham Act under false advertising^[3]. Many states also have consumer protection statutes that mirror or expand upon federal regulations. 

Before you take the legal route, it’s recommended to gather evidence of false advertising (e.g., screenshots of the original offer vs. the item you received), the unexpected change in terms, and any financial losses incurred. Once you have the detailed documentation ready, you have several options to escalate:

• Contact the seller—Start by demanding a refund or price adjustment in writing. Many businesses try to resolve issues this way to avoid legal trouble.
• Report to authorities—If the seller doesn’t offer a solution, you can file a complaint with the FTC at ReportFraud.ftc.gov or your state’s consumer protection office.
• Dispute charges—If you used a credit card for the purchase, you can use protections under the Fair Credit Billing Act (FCBA) within 60 days^[4]. For debit cards, payment fraud protections under the Electronic Fund Transfer Act (EFTA)^[5] may apply.
• Consult a lawyer—For losses over $1,000, a consumer protection attorney can help sue for damages or join class actions.

How To Protect Yourself From Bait-and-Switch Scams

Bait-and-switch scams prey on trust and urgency, but with the right precautions, you can shop online confidently without falling victim to deceptive tactics. Here’s how to stay ahead of fraudsters and avoid falling into these traps:

1. Research the seller or website—When shopping with new sellers or platforms, verify their reputation by checking independent reviews, ratings, and any history of complaints on platforms like Better Business Bureau (BBB) or Trustpilot.
2. Review offers carefully—If a deal appears unusually attractive or time-limited, it may be worthwhile to step back and research further before rushing into the transaction.
3. Read the fine print—Important details about pricing, hidden fees, or auto-renewal clauses are sometimes disclosed only in an offer’s less prominent sections.
4. Ask for additional information or documentation—If you’re unsure about a product or service, you can request more photos, specifications, or written confirmation of the offer. Sellers who are reluctant to provide details may not be acting in good faith.
5. Avoid instant payment methods—Wire transfers, gift cards, or cryptocurrency payments offer much weaker protections than credit cards. It can be difficult to recover your funds when using these payment methods if you unknowingly fall victim to a scam.

However, even with careful shopping, some scams might slip through. To add an extra layer of safety when shopping online, consider using virtual cards as a more secure payment method. Virtual cards feature unique and disposable 16-digit card numbers that act as a stand-in for your regular credit or debit cards.

If you opt for a specialized virtual card provider like Privacy, you can further enhance your protection. With advanced spending controls and versatile card types, bait-and-switch scammers can’t take advantage through unauthorized overcharges and recurring billing traps.

Privacy Virtual Cards—Complete Protection Against Hidden Fees and Overcharges

Privacy lets you easily generate virtual cards after linking your debit card or bank account as the funding source. You can use these cards with most websites and merchants that accept U.S. Visa^® and Mastercard^® payments.

As a BBB^®-accredited and PCI-DSS-compliant virtual card provider, Privacy employs rigorous security and fraud protection methods such as:

• Data encryption—Privacy uses AES-256 encryption to safeguard your data against unauthorized access.
• Two-factor authentication (2FA)—You can set up an additional authentication method, such as an SMS OTP or an authenticator app, before allowing access to your account.
• Transaction alerts—You’re instantly notified whenever your cards are used or declined, helping you detect and respond to potentially fraudulent charges.
• Protected servers—Privacy employs firewalled servers with regular updates to protect your data from malicious actors.

Privacy Card Types and Controls

Privacy offers three card types, each one offering unique features and protections:

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Privacy lets you set spending limits on all your virtual cards, which can keep you safe from common bait-and-switch fraud tactics. If a company tries to add hidden fees or switch you to a higher-priced product at checkout, Privacy will automatically decline transactions exceeding the preset limit.

You can also pause or close your virtual cards at any time without affecting your primary account. This feature is ideal for avoiding unwanted charges from services that make it difficult to cancel subscriptions.

Additional Convenience Features

To help you manage your cards easily from different devices, Privacy offers several convenience features:

1. Privacy Browser Extension—Available for Firefox, Edge, Chrome, Safari, and Safari for iOS, the browser extension allows you to quickly create and autofill card details for faster checkouts.
2. Privacy App—Compatible with Android or iOS devices, the mobile app lets you manage your cards, track transactions, and pause or close them directly from your smartphone.
3. 1Password integration—If you’re a 1Password user, this integration lets you create and use Privacy Cards directly from the password manager's browser extension.
4. Card Notes—Privacy allows you to add custom notes to each virtual card, which can help track your spending or organize your expenses.
5. Shared Cards—You can share Privacy Cards with trusted family members and friends, giving them convenient access to funds without revealing your sensitive information.

How To Join Privacy

To join Privacy and make secure online payments, follow these quick steps:

1. Sign up for a new account
2. Provide your mandatory KYC information
3. Connect a funding source (bank account or debit card) with your Privacy account
4. Request and generate your first Privacy Card

Privacy offers four plans, depending on your specific needs:

References

^[1] Federal Trade Commission. https://www.ftc.gov/enforcement/penalty-offenses/bait-switch, sourced April 23, 2025

^[2] Federal Reserve. https://www.federalreserve.gov/boarddocs/supmanual/cch/200806/ftca.pdf, sourced April 23, 2025

^[3] Legal Information Institute. https://www.law.cornell.edu/uscode/text/15/1125, sourced April 23, 2025

^[4] U.S. Government Publishing Office. https://www.govinfo.gov/content/pkg/GOVPUB-FT-PURL-LPS73998/pdf/GOVPUB-FT-PURL-LPS73998.pdf, sourced April 23, 2025

^[5] Federal Reserve. https://www.federalreserve.gov/boarddocs/caletters/2008/0807/08-07_attachment.pdf, sourced April 23, 2025

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