6 Major Holiday Scams and How to Identify Them This Season

Don’t let fraudsters steal your cheer this season. Here are ways you can stay safe while gearing up for the holidays.

The most wonderful time of the year is quickly approaching. While it's an exciting time for most, it's an even better time for swindlers working hard to take advantage of your generosity while you’re shopping, traveling, or exchanging gifts with friends and family.

According to a 2022 AARP Fraud Watch Network™ Report, three-quarters of U.S. consumers have experienced or been targeted by at least one form of holiday-related fraud. There are several ways fraudsters will attempt to rob you of your festive mood this year but remaining vigilant against fraud is one way to lower stress during the busy holiday season.

Following are six fraud schemes you should be aware of and how to prevent them.

1. Fake Social Media Gift Exchanges

Exchanging gifts with friends, family, and coworkers is exciting – especially when you finally find out who drew your name for Secret Santa. This is fun in real life but never fall for online gift exchanges that pop up on your social media feed with people you’ve never met, as its most likely a scam.

According to the Better Business Bureau, one notorious example of this scenario is the “Secret Sister” gift exchange campaign that quickly gained popularity years ago on Facebook. The scam promises that each participant would receive up to 36 gifts in exchange for sending one gift. Victims of this scam then enter their name, home address, and then some of their friends and family’s personal information before adding it to a list of other participants. Once added, you send a gift to a “stranger” but never get anything back. Now fraudsters have a database filled with vulnerable information that can be used to commit identity theft or in other scams.

How to avoid it: For starters, always be aware of the new variations of the scheme that inevitably pop up each year. The BBB recommends that when someone promises gifts or cash by mail, email, or social media, you should:

• Ignore it.

• Report social media posts.

• Never give your personal information to strangers.

• Be wary of false claims.

2. Gift Card Scam

Gift card scams are on the rise. According to the Federal Trade Commission (FTC), nearly 40,000 consumers reported losing $148 million in gift card scams in the first nine months of 2021. Common gift card scams include fraudsters demanding people pay a fee with a gift card because they are in trouble with a government agency, like the Social Security Administration, for example, or need money for a friend or family member who needs the funds. They will demand funds from a gift card to fix a “problem” with your account and threaten to freeze it if you don’t act on their request.

To avoid this scam, remember that it's not real if someone demands you pay them with a gift card. No legitimate government or agency will ask you to pay with this payment method.

3. Fake Website Scam

Have a holly, jolly holiday season free of fraud. The holidays bring some of the busiest shopping days of the year. With that comes a more significant opportunity for hackers and fraudsters to target you, your business, and even your family with elaborate schemes. More than ever, consumers are choosing to shop online rather than visiting brick-and-mortar stores for all their holiday shopping needs. For example, U.S. shoppers spent a record-breaking $9.12 billion online on Black Friday, a 2.3-percent increase from the last year (1).

Fraudsters are keen on trends like this, and as a result, fake website scams are growing in popularity. Scammers will create phony websites and fake online businesses, add fake “positive” reviews, throw in a fake street address (or sometimes use the actual location of an unsuspecting business), and wait for payments. Unsuspecting customers who fall for the scheme submit online payments or wire transfers for a transaction (2). Sadly, because the company does not exist, you can’t track scam artists and recover the funds.

Checking to see if a website is legitimate is a simple way to prevent this type of fraud. To do so:

• Carefully look at the address bar and URL.

• Double-check the domain name — scammers will spoof domain names to make them look like legitimate websites, such as Yahoo (Yah00). Always check your address bar to ensure you will be redirected to a legitimate site before clicking on a link.

• Look out for poor spelling and grammar.

4. Fake Charity Scam

Fake charity scams run year-round but are especially rampant during the holidays when people are in the giving spirit. According to the FBI, charity fraud schemes seek donations for organizations that do little or no work — instead, the money goes to the fake charity’s creator. This scam can come in many forms, including emails, social media posts, crowdfunding platforms, cold calls, and more.

Follow these tips from the FBI to prevent this type of scam:

• Give to established charities or groups whose work you know and trust.

• Be aware of organizations with copycat names or names like reputable organizations.

• Do your research: use the Federal Trade Commission’s resources to examine the track record of a charity.

• Give using a check or credit card. If a charity or organization asks you to donate through cash, gift card, virtual currency, or wire transfer, it’s probably a scam.

• Practice good cyber hygiene:

- Don’t click links or open email attachments from someone you don’t know.

- Manually type out links instead of clicking on them.

- Don’t provide any personal information in response to an email, robocall, or robotext.

- Check the website’s address — most legitimate charity organization websites use .org, not .com.

5. Package Delivery Scams

More online shopping means consumers are eagerly waiting for packages to arrive. Unfortunately, that means fraudsters are devising new ways to scheme you. In a delivery notification scam, fraudsters will send a fake text message or email that says a major delivery carrier needs you to “update delivery preferences” by clicking on a link (3). This is very similar to common phishing emails also used to solicit personal information. In some instances, you might receive a voicemail message stating to return a call or a “missed delivery” tag on your door with a call-back number.

To avoid this type of scam, never click on a link or call if you aren’t expecting a package. Also be on the lookout for:

• Poor spelling or grammar.

• Requests for sensitive or personal information, or to update delivery information.

• Requests to send or move money.

• A sense of urgency.

If you are waiting on a package, the Federal Communications Commission recommends directly contacting the delivery service or seller using a verified number or website.

6. Holiday Travel and Online Airfare Scams

Based on survey reports, nearly 111 million Americans plan to travel for a December holiday such as Christmas, Hanukkah, or Kwanzaa this year (4). If you plan to travel by plane, you should be aware of online airfare scams. Earlier this year, the BBB Scam Tracker found that scammers were creating fake airline ticket booking sites or customer service numbers to charge travelers for rescheduling fake flights.

Picture this scenario: You’re searching online for cheap flights and find what appears to be a great deal with a well-known airline. You book the flight either online or by phone. Shortly after, you receive a call from the company stating there was a sudden price increase, or an extra fee tacked on to finalize the booking. That's when you realize you purchased tickets through a scam website or phony customer service number, which was a ploy to get more money from you.

Another scenario may include fraudsters sending you a fake email or text message claiming your real flight has been canceled. If you call to book another flight without verifying the claim, you have just given your credit card information to a scammer.

To avoid travel scams, the BBB recommends you:

• Do your research.

• Double-check flight details before calling support.

• Confirm the URL before you enter personal and payment information.

• Be wary of third-party websites.

• Make online purchases with your credit card, as you can usually dispute them.

You Become a Victim of Fraud. Now What?

If you took all the steps to prevent a fraudulent attack or holiday scam and it still happened, don’t worry. You aren’t alone. Acting quickly against fraudsters is the first step to stopping them. Here are ways you can recover after an attack:

• Think locally and report the scam to your local law enforcement.

• Match the agency to the crime: find the correct government agency to help you handle your case.

• Focus on emotional healing.

This time of year is filled with lots of hustle and bustle, but don’t let that distract you from staying alert to common scams and nefarious schemes like those above. Staying vigilant during the holiday season means you can celebrate the holiday season with friends and family without fearing a fraudulent disruption.

Sources:

1. Investopedia: Online Retail Sales Hit Record $9 Billion on Black Friday

2. North Dakota: Fake Website Scams

3. Federal Communications Commission: How to Identify and Avoid Package Delivery Scams

4. The Vacationer