The holidays are a time for joy, family, and giving. Unfortunately, it’s also a peak time for financial scams. As you shop for gifts and donate to charities, remember scammers often prey on generosity and holiday cheer.

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Holiday Season: Peak Time for Financial Scams

Common Holiday Scams

Recognizing common holiday scams is the first step to protecting yourself. During the holiday season, increased shopping activity and holiday deals can attract scammers using sophisticated tactics.

Non-Delivery Scams

These scams offer too-good-to-be-true deals on popular gifts. Shoppers are lured to fake e-commerce websites or social media ads, place orders, and never receive their merchandise.

According to the Federal Trade Commission (FTC), these scams cost consumers $73 million in 2023. Beyond the financial loss, such fraud can create holiday stress and disappointment.

Gift Card Scams

Gift cards are popular presents, and scammers exploit this. They may impersonate charities or businesses to convince you to purchase gift cards and send them the codes.

Once you send the codes, the money is gone. This is a particularly heartbreaking holiday scam.

Fake Charities

During the season of giving, fake charities appear, soliciting donations with emotional pleas. AARP research indicates that most U.S. consumers have encountered a holiday scam.

Be wary of unfamiliar organizations, even if they appear legitimate. Always verify charities through websites like Charity Navigator or the Better Business Bureau before donating.

Look for organizations with transparent financial practices and proven track records. Sharing gift card information is uncommon for legitimate charities. Transferring money directly to unfamiliar organizations or people during the holidays can result in funds not reaching their intended recipients.

Phishing Emails and Fake Websites

The holidays bring many retail email scams, some very sophisticated. TransUnion’s data flagged 3.6% of global e-commerce transactions as potentially fraudulent during the 2023 holidays. These phishing emails often masquerade as retailers or delivery services, sometimes appearing remarkably genuine.

They might have urgent subject lines like delivery failure notices or enticing holiday promotions. Be wary of emails requesting personal information like bank account numbers or login credentials.

Avoid clicking on links in emails; instead, manually enter web addresses in your browser. Enable multi-factor authentication for account online, wherever available.

Protecting Yourself From Financial Scams

The holiday season combines increased online shopping, emotional appeals, and complex scam tactics, increasing fraud risk. Learn the following tips for fraud prevention.

Scrutinize Deals

If a deal seems unbelievably good, be suspicious. Research unfamiliar retailers and websites. If it seems too good to be true, it probably is. Look out for unusually low prices or limited-time offers.

Verify Website Security

Look for “https” and a padlock icon in the website address. This indicates encryption, protecting your payment methods. Check website domain names carefully for any inconsistencies with legitimate websites. Be aware of lookalike sites that may have one character different or use a different domain extension.

Use Secure Payment Methods

Use credit cards, which offer better fraud protection than debit cards. Avoid using gift cards or wire transfers for unfamiliar purchases or donations.

Using strong, unique passwords for each online account adds a layer of security. Review your bank and credit card statements frequently to spot unauthorized transactions or unusual account activity.

Track Shipments Diligently

Use tracking numbers to monitor your packages. Verify shipping and billing addresses match your information. If something seems wrong or delivery is significantly delayed, immediately contact the retailer or shipping company to check the status of your package.

Guard Your Information

Be wary of impersonation scams where scammers pose as representatives from banks, government agencies, or other trusted institutions. If you are contacted by someone claiming to represent your financial institution, do not click on links provided in emails or text messages. Always initiate contact directly with banks or institutions via official channels such as the official website or established customer service numbers. Avoid using public Wi-Fi for online banking or shopping, as it is more vulnerable to cyberattacks.

Reporting Holiday Scams

If you become a victim of holiday fraud, here’s what to do:

  1. Report to the FBI’s Internet Crime Complaint Center (IC3). Provide all scam details, including websites, emails, or phone numbers. Detailed reporting aids investigations and helps prevent future victims.
  2. Contact your financial institution. Notify your bank or credit card company of unauthorized transactions. They may offer zero liability protection or refund programs.
  3. Place a fraud alert on your credit reports through AnnualCreditReport.com. This alerts companies to verify your identity before granting new credit.
  4. File a complaint with the Federal Trade Commission (FTC).
  5. Report the incident to your local police department. They may connect you with other victims or assist with local investigations.

Conclusion

The holiday season should be filled with cheer, not the stress of financial scams. While the holidays are a prime time for fraudulent activity, vigilance and awareness are your best defenses.

Protect yourself by recognizing common scams and taking proactive steps to avoid them. Educate yourself and your family members about holiday scams and safety tips to stay safe during the holiday season. The holidays should be about enjoying time with loved ones, not dealing with financial stress. Planning and awareness can ensure a joyous and scam-free holiday season.