Thursday, October 13 CCCU
'Tis the season of gift-giving, but with it comes a fresh wave of financial crimes to look out for. According to the Internet Crime Compliance Center
, non-payment or non-delivery scams cost consumers more than $337 million in 2021. Credit card fraud accounted for another $173 million in losses.
What are holiday scams, exactly, and what can you do about them? Holiday scams are essentially ploys designed to trick someone—whether successfully or unsuccessfully—into providing personal information or actual funds.
How do I avoid holiday shopping scams?
Shoppers are becoming savvier, but so are fraudsters and cybercriminals. The best way to avoid holiday shopping scams is to familiarize yourself with the latest schemes.
The most common money scams during the holidays include:
Let’s dive into the details of these all-too-common holiday scams, along with tips on what you can do to protect your holiday savings.
- Faux charities
- Counterfeit gift cards
- Travel scams
- Text and email links from "retailers"
- Suspicious delivery alerts
- Social media gift chains
- Too-good-to-be-true deals
If you're like other folks, the festive season might inspire a charitable spirit. While we're all for giving back, you'll want to be mindful of where your money is going.
What to do
First and foremost, verify the organization or cause through an independent Google search and review the FBI's recent alerts on charity scams
. Many faux charities will pressure you to make a donation at that moment.
For crowdfunding requests, figure out who is running the charity and do a reverse image search of photos used on the page. The Federal Trade Commission (FTC) has additional tips for donating through crowdfunding sites
Counterfeit gift cards
Scammers often try to sell empty, expired, stolen, or otherwise counterfeit gift cards this time of year. Seeing as they account for roughly 20%
of all holiday gift-giving, you're wise to know how to spot a fake.
What to do
Purchase gift cards directly from the brand or retailer, whether online or in-store, and always inspect the expiration dates and activation codes. Additionally, be skeptical of discounted gift cards or those sold on auction sites.
Despite concerns over flight cancellations and rising travel costs, nearly half of adults
in the U.S. plan to travel during the holiday season, which sets the stage for travel scams, deceptive booking sites, false airline miles, and credit card account "perks."
What to do
With travel fraud, you'll want to look out for emails, phone calls, or text messages announcing you've won a free vacation. Since travel deals often coincide with credit card perks, you might also see some sneaky attempts to get you to apply for a fake line of credit.
Text and email links from "retailers"
The FTC warns that holiday scammers often send text messages or emails in an attempt to gather personal information, coerce you into paying an illegitimate fee, or get you to download malware.
What to do
Generally speaking, anytime you receive an unsolicited email or text from an unknown number with a link to click, it's best to just ignore and delete. If a brand or organization needs additional information from you to fulfill an order, they'll contact you through a secure portal.
Suspicious delivery alerts
With an abundance of holiday packages being delivered across the U.S. and to and from other countries, you might come across phishing emails or texts
seeking personal information or payment.
What to do
As with text and emails with suspicious links, be wary of any correspondence alerting you of a missed delivery, a need for your signature, or a request to approve delivery at an alternative location. Always track your shipments on the retailer's website or directly through the carrier.
Social media gift chains
Sadly, scammers often attempt to exploit people's gift-giving spirit and desire to connect with others during the holidays. One of the sneakiest ploys this time of year is the social media gift chain.
Sometimes called "secret sister gift exchange" or "$10 secret Santa exchange," folks are encouraged to sign up with their name and mailing address, then invite a few more friends to join.
According to the FTC, these are illegal pyramid schemes
. Many even use the same nonsensical "math" of traditional pyramid schemes by claiming you'll get multiple gifts back by sending only one out.
What to do
To avoid getting caught in one of these social media chains, be sure to only join holiday gift exchanges with your loved ones, co-workers, or groups in which you know or can vet all members. Additionally, you should never have to provide your mailing address or other personal information to join.
The holidays are rife with deals, discounts, and promos of all kinds. It could be in the form of accessing a "free trip" via text message, claiming a "prize" after providing personal information, purchasing "half-off" gift cards, or scoring "90% off" a high-priced item
on your list.
Though it's true there are more sales than usual this time of year, it's still smart to proceed with caution—especially when something seems too good to be true.
What to do
Knowing how to protect your identity and look out for phishing scams is a critical component of financial literacy
. As mentioned above, don't click links from unknown senders, and purchase products and gift cards directly from the brand or a verified retailer.
Additionally, keep an eye out for misspellings, inconsistent formatting or capitalizations, and emails from senders that are slightly off from the brand or retailer's email address. You'll also want to avoid clicking pop-ups for too-good-to-be-true deals when browsing the internet.
Safeguard your money year-round with CCCU
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, including multi-layer login authentication, Secure Socket Layer (SSL) encryption, 24/7 monitoring, and continual cybersecurity updates.
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You may also be interested in our Preventing Account Takeover Fraud article.