How to Spot and Avoid Financial Scams This Holiday
According to AARP’s 2023 Holiday Shopping Scams and Fraud Survey, a “majority of consumers have experienced or been targeted by at least one form of fraud that can be tied to the holidays, including end-of-year charitable donation requests, purchasing an item through an online ad, and receiving fake notifications about shipping issues.”
Although the statistics are alarming, there’s no need to let the fear of fraud dampen your spirit during this magical time of year. Instead, learn what to watch for and how to protect yourself from scammers, ensuring they earn a place on Santa’s ‘naughty list’ this holiday season.
Six Holiday Financial Scams To Avoid This Season
Here are six financial scams to be on the lookout for this holiday season:
The Amazon Scam
For many holiday shoppers, Amazon is a go-to for gift ideas and deals. However, be cautious of emails, text messages, and phone calls claiming to be from Amazon; they could be fraudulent attempts to steal your information.
For instance, if you receive a text message claiming to be from Amazon that says there is a problem with your payment information, disregard it. This could be a smishing attempt to steal your personal information. Instead, log in to your Amazon account and check the Message Center for legitimate Amazon communications.
Learn more about smishing and avoiding this common fraud tactic during the holidays.
The Romance Scam
Although the holiday season represents a time of togetherness for many, it can be lonely for others. Fraudsters exploit individuals’ emotions during the holidays using social media and dating websites. They may impersonate someone seeking a meaningful relationship or needing money.
According to the 2023 Consumer Impact Report from the Identity Theft Resource Center, romance scams consistently result in six-figure losses, drawing attention to the seriousness of these scams.
To avoid falling victim to such schemes, verifying the identity of the person you’re communicating with is essential. If they request money or personal information, consider it an immediate red flag for potentially fraudulent activity. Never share personal information with someone you haven’t met in person.
The Gift Card Scam
Be cautious of phone calls, emails, or text messages from individuals who request that you purchase a gift card as payment for an outstanding bill or prepayment for a service they claim to offer.
For instance, they might propose a home-related service in exchange for an Amazon gift card purchased upfront. After you acquire the gift card, they’ll request its number and PIN, granting them access to the card’s funds without needing the physical card. This leaves you with an empty gift card and no service rendered in return.
To ensure your holiday season stays merry and scam-free, remember that legitimate businesses or government agencies do not request payment in the form of gift cards.
If you purchase gift cards this holiday season, save receipts and take pictures of the card numbers and PINs. This information can bring peace of mind if you find yourself in this unfortunate situation. Plus, it will allow you to file a report with the gift card company or the Federal Trade Commission (FTC) if you do suspect any fraud.
The Charity Scam
The holidays are a time when many people donate to charities. Yet, it’s important to be cautious of fraudsters who may try to exploit this spirit of generosity.
They may reach out via phone, email, text message, or even through crowdsourcing platforms, soliciting donations on behalf of a charity that is near and dear to your heart. Additionally, they might redirect you to a fraudulent website, urging you to enter payment information or attempt to get you on the phone to disclose personal information.
If you choose to make donations this holiday season, consider using a credit card if it’s an option. Many major card issuers have zero-liability policies that provide financial protection against fraud, ensuring your generosity remains secure.
On the other hand, cash, cryptocurrency, and wire transfers can be more challenging to recover, so it’s advisable to avoid using these methods when donating. If asked to donate using any of these payment methods, it should alert you to a potential fraudulent scheme.
Furthermore, gathering information about the charity, including its name and the cause it supports, is essential if you receive a solicitation for a donation. Utilize reputable websites such as Charity Watch or Charity Navigator to assess the organization’s legitimacy.
The Lottery Scam
Generally, if something appears too good to be true, it usually is. This practice applies to the prevalent holiday scheme involving fraudsters claiming you’ve won a substantial prize just in time for the holidays, all yours for the taking if you share your personal information with them.
Exercise caution if you find yourself in a situation where you’re supposedly winning big this holiday season. Ask for the name of the company claiming you’ve won the prize and contact them directly to verify your status as a winner. Instead of using the contact details provided by the person who claimed you won, research the company’s website and use the contact information listed there.
Remember, a legitimate prize should never require you to disclose personal information or make a payment.
The Shipping Scam
Have you ever come home to an unexpected package, only to excitedly tear it open and realize it’s not something you ordered? If so, you may have been swept into a scam called “brushing.” Although getting a free item in the mail might seem harmless, this increasingly common shipping scam uses inexpensive, unexpected shipments to deceive—and potentially harm—the recipients.
A brushing scam is when online sellers send you unsolicited packages to boost their product rankings. They create fake accounts using legitimate (but often stolen) personal information, place fake orders, and post glowing reviews designed to manipulate the online marketplaces’ algorithms.
In some cases, scammers include QR codes in the packages, which, if scanned, can lead to malicious websites intended to steal your personal information or install harmful software on your device.
To protect yourself from a brushing scam, don’t scan unknown QR codes, monitor your accounts for suspicious activity, change passwords frequently, and report any unexpected packages to the appropriate vendors or authorities.
You can learn more about recognizing and avoiding this particular form of fraud on our brushing scam blog.
How To Be a Fraud Fighter During the Holidays
Protecting yourself from fraud is a year-round necessity. Staying vigilant is especially important during the holiday season when fraud rates tend to rise. Learn more about common scams and ways to protect your accounts in the Connexus Security & Fraud center.