As the holiday season approaches, shoppers are expected to spend billions of dollars on gifts, with a significant portion of these purchases made online. While this creates an exciting shopping experience for many, it also presents opportunities for scammers to take advantage of busy consumers.
Margarita Alvarez, Senior Vice President of Consumer Risk Programs at Wells Fargo, warns that the busy nature of the holiday season can cause people to let their guard down. Scammers use this to their advantage by targeting consumers who are distracted or rushing to complete their shopping.
The Cost of Scams
Scammers have been stealing billions from consumers worldwide. A report from the Global Anti-Scam Alliance estimates that fraudsters have scammed over $1 trillion globally. Unfortunately, this number could be even higher, as many victims are too embarrassed to report their losses. In the U.S., the Federal Trade Commission reports that consumers lost more than $10 billion to scams in 2023.
A study by the Better Business Bureau (BBB) revealed that scam reports have increased by 125%, especially scams targeting holiday shoppers with fake advertisements offering deep discounts or hard-to-find items. Over 80% of these scam reports involved losses from online purchase scams, which are among the most common types of fraud.
Another significant concern during the holidays is porch piracy, where thieves steal packages left on doorsteps. A recent CNET report suggests that more than $97 billion worth of packages could be vulnerable to theft this holiday season. Nearly 1 in 6 U.S. adults reported being victims of porch piracy, but many consumers are now using tracking services and security cameras to protect their deliveries.
Holiday Scams to Watch Out For
Here are some of the most common holiday scams and tips on how to protect yourself:
- The Hot Toy Scam: Scammers often target parents looking for the most in-demand toys with fake deals. Only shop from reputable retailers and avoid clicking on suspicious links in emails or social media messages.
- Fake Package Notifications: Be cautious of unsolicited texts or emails claiming to help you track or recover a lost package. These could be phishing attempts to steal your personal information.
- Fake Charities: Many scammers take advantage of the generosity that comes with the holiday season by creating fake charity campaigns. Research any charity before donating to ensure it’s legitimate.
- Holiday Job Scams: There’s often a rise in part-time job offers during the holidays. Scammers may create fake job listings to steal your money or personal details. Always verify the legitimacy of any job offer.
- Gift Card Scams: Be wary of buying gift cards from third-party websites, as scammers may sell expired or fraudulent cards. Never respond to unsolicited requests for gift cards via email or text.
- Social Media Scams: Scammers may approach you on social media with friendly messages before asking for money. Be cautious about accepting friend requests or messages from unknown contacts, and never send money to someone you don’t trust.
- Deals Too Good to Be True: Scammers will lure shoppers with deeply discounted prices or offers that seem too good to pass up. If a deal sounds too good to be true, it probably is. Always compare prices and check the reputation of the retailer.
- Fake Websites: Scammers create fake websites that look nearly identical to legitimate online stores. Always double-check the website’s URL for slight spelling variations and ensure that the website is secure by looking for “https” and a padlock icon in the browser address bar.
- Use Secure Payment Methods: When shopping online, always use a credit card rather than a debit card or peer-to-peer payment app. Credit cards offer better protection against fraud and unauthorized transactions.
- Fake Reviews: Scammers may use artificial intelligence to create fake reviews to manipulate consumers. Do your own research and read reviews from trusted sources before making a purchase.
- Payment App Scams: Fraudsters often impersonate banks or credit card companies and tell you there’s fraud on your account, urging you to transfer money to protect it. Never transfer money to anyone claiming to be your bank without verifying the request.
- Account Takeovers: Keep a close eye on your accounts for any unusual activity, such as unrecognized purchases or changes to your personal information. Scammers often gain unauthorized access to accounts to make purchases or steal funds.
- Public Wi-Fi Risks: Avoid using public Wi-Fi networks to make online purchases, as scammers can exploit unsecured connections to steal your sensitive information. Use a private, secure network or mobile data instead.
By staying vigilant and following these tips, you can reduce your risk of falling for scams while shopping this holiday season. Be cautious, protect your personal information, and enjoy the holidays without the worry of fraud.