As the holiday shopping season heats up, financial fraudsters also ramp up their activity. Three-quarters of Americans say they’ve experienced or have been targeted by holiday season financial fraud, according to a survey.
Keeping your money and your personal information safe is always important, but the risks may be higher during the holiday season. Take time to learn about the types of scams that are most common this time of year, and the steps you can take to protect yourself.
Common Holiday Scams and How to Avoid Them
Holiday financial fraud is often similar to other types of financial fraud, but criminals target holiday shoppers who are often spending more money and may be less vigilant about protecting themselves during a busy season.
In a recent ScoreSense survey, 91% of respondents said they plan to do holiday shopping online (68% at Amazon.com, and 23% at other online retailers). As more people are shopping online for the holidays, fraudsters have increased their efforts accordingly.
Here’s a look at some of the most common holiday scams, and what you can do to avoid becoming a victim.
Fraudulent Online Ads
How it works: Criminals often place ads on social media that lead you to fake online stores. Often, these websites look very similar to the websites of well-known retailers. If you attempt to purchase an item at the fake online store, the criminal will steal your money, credit card details, or personal information. And you may be waiting for an item that you will never receive. During 2022, Americans lost more than $281 million to online shopping and non-delivery scams, according to the FBI.
Avoid becoming a victim: Shop from reputable stores online. If you want to purchase something from a smaller retailer, Google the store’s name “+ scam” to learn if there are any known scams involving the shop.
Even when you’re buying from a well-known retailer, make sure the site is reputable: Fake stores often advertise discounts of 50% off or more on all their items, contain poor spelling, grammar, and poor quality images, and don’t have basic company information such as contact information or returns information. If you’re not sure the site is legitimate, avoid purchasing from it.
Gift Card Scams
How it works: Scammers often go into a store, copy the serial number and activation PIN from gift cards that are on the display rack. They then wait for someone else to actually buy those cards, and as soon as the card is activated, they use it quickly. When the purchaser gives the card to a friend or family member as a gift, they are unaware that the card now has a zero balance. According to AARP, 23% of Americans have given or received gift cards that had no funds on them, and more than half of those who tried to get a credit for the missing balance were unable to get a refund.
Avoid becoming a victim: Before purchasing a gift card, carefully check for any tears in the packaging, scratches on the card that might indicate the activation code has been compromised, or any other signs that the sticker over the bar code has been replaced. Avoid purchasing gift cards on resale sites, and if time allows, consider purchasing gift cards online directly from the retailer.
Package and Delivery Scams
How it works: Online shoppers are often waiting for package deliveries, and fraudsters take advantage of that by sending texts or emails claiming to be from FedEx, UPS, USPS or other delivery services The message often says there’s been an issue with your delivery, and asks you to click a link to find your package or update your information. By clicking the link, the scammer may install malware on your computer or device, which can steal personal information, or the link may ask you to enter personal information such as your Social Security number or credit card number.
Less tech-savvy scammers often steal packages after they’ve been delivered. In the AARP study, 27% of respondents said they have had a package stolen from outside their doors.
Avoid becoming a victim: Never click on a link in a text message or email claiming to be from a delivery company. Instead, use the delivery company’s official website to track the progress of a delivery.
To avoid porch pirates stealing your packages, consider having the items shipped to a secure pickup place, such as using “ship to store” or an Amazon locker. You can also schedule deliveries to be made only when someone will be home to receive them, or use a security camera that may deter thieves. Before assuming a package was stolen, however, check with your neighbors to see if it was simply delivered to the wrong place.
Charity Scams
How it works: In addition to shopping, the holiday season is also a popular time for giving to charities. Fraudsters take advantage of people’s goodwill this time of year to create fraudulent charities to steal your money, or stage fake GoFundMe campaigns to trick you into giving money or sharing your personal information.
Avoid becoming a victim: Always research an organization before giving them money. You can use a site like Charity Navigator to check the legitimacy of an organization that approaches you for a donation. Before donating to a GoFundMe request, find out as much as you can about the recipient and the person who set up the request. It’s wise to avoid giving to a GoFundMe request without personal knowledge of the situation. Always use a secure credit card when making a donation.
Even the most vigilant holiday shoppers often become victims of financial fraud. ScoreSense keeps a close watch on your credit and alerts you about reported changes that could signal fraudulent behavior. If you’re not a member, try a 7-day trial.
