With billions of dollars expected to be spent on gifts this holiday season, including significant amounts online, scammers are out in full force, eager to get their hands on a piece of the pie. Many fraudsters take advantage of the busy holiday period, knowing that consumers may let their guard down as they juggle gift buying and holiday preparations.
Margarita Alvarez, Senior Vice President of Consumer Risk Programs at Wells Fargo, warns that the increase in transactions during the holidays makes consumers more susceptible to scams. “Scammers are trying to capitalize on the high volume of activity, which can make it easier to trick unsuspecting shoppers,” she said.
Consumers Lose Billions to Scammers Annually
A recent report by the Global Anti-Scam Alliance revealed that scammers had swindled over $1.03 trillion globally, with the true number likely being even higher due to unreported cases. In the U.S., the Federal Trade Commission reported that consumers lost more than $10 billion to fraud in 2023.
A new study from the Better Business Bureau (BBB) highlights a significant uptick in scam reports, particularly targeting holiday shoppers. These scams include fake advertisements offering steep discounts or hard-to-find popular items. According to the BBB, online purchase scams are one of the most common frauds, with more than 80% of scam reports indicating victims lost money.
Another growing concern is porch piracy. A report by CNET warns that packages worth over $97 billion could be at risk of theft this holiday season. Nearly one in six U.S. adults have already fallen victim to porch pirates, and 71% of consumers are using package tracking and home security cameras to protect their deliveries.
Holiday Scams to Watch Out For – And How to Stay Safe
Here are some common holiday scams to be aware of, along with expert advice on how to avoid them. These tips come from sources such as Wells Fargo, Chase Bank, BMO, Feedzai, and BioCatch:
- The “It” Toy Scam: Scammers target parents desperate to secure the hottest toys with fake links. Always ensure you’re shopping with reputable retailers and avoid unsolicited emails, advises Alvarez from Wells Fargo.
- Fake Package Notifications: Be cautious of unsolicited text messages or emails claiming to be from a delivery service, asking you to “track” a package or offering help with a “lost” package.
- Fake Charities: Scammers often take advantage of people’s generosity at year-end. Before donating, thoroughly research charities to ensure your contribution is going to a legitimate cause.
- Holiday Job Scams: The rise of part-time work during the holidays also attracts fraudsters. Be wary of fake job offers that ask for personal information or upfront fees.
- Gift Card Scams: Avoid purchasing gift cards from third-party sites, as scammers may sell expired or pre-loaded cards. Don’t respond to unsolicited emails or text messages offering gift cards; it could be a way to steal your personal information.
- “Friendly” Messages on Social Apps: Scammers may first build rapport through friendly chats and later ask for money. Always be cautious when receiving unsolicited messages from unfamiliar contacts and never send money to someone you don’t know.
- Deals That Are Too Good to Be True: Scammers often lure shoppers with unrealistically low prices or irresistible offers. If a deal sounds too good to be true, it probably is. Compare prices from trusted retailers before making a purchase.
- Check the Website Carefully: Scammers frequently create fake websites that mimic legitimate stores. Double-check the website URL for slight misspellings or variations, and ensure the site is secure by looking for “https” and a padlock icon in the address bar.
- Use a Secure Payment Method: Always use a credit card for online purchases when possible, as it offers better fraud protection than debit cards or peer-to-peer payment apps, says Feedzai.
- Be Skeptical of Fake Reviews: Fraudsters often use artificial intelligence to generate fake product reviews. To make informed decisions, look for reviews from trusted sources and avoid relying solely on online testimonials.
- Payment App Scams: Fraudsters frequently use payment apps to carry out scams. These schemes often begin with a phone call from someone pretending to be from your bank, claiming fraud has been detected on your account. They may try to convince you to transfer money to “protect” your funds, but the account is actually controlled by the scammer.
- Beware of Account Takeovers: Watch for unusual activity on your accounts, such as unexpected orders or unfamiliar shipping addresses. Account takeover fraud occurs when scammers gain unauthorized access to make purchases or transfer funds.
- Avoid Public Wi-Fi When Shopping: Public Wi-Fi networks are often unsecured, making it easy for fraudsters to steal your sensitive data. When shopping online, use a secure, private internet connection.
By staying vigilant and following these tips, you can protect yourself from falling victim to holiday scams and enjoy a safer shopping experience this season.