Halloween wasn’t very long ago but, with Black Friday and Cyber Monday on the horizon, some people are already focusing on holiday shopping and gift-giving.
This year, holiday spending is projected to reach record levels, according to the National Retail Federation. The industry group expects spending in November and December to total about $960 billion, an increase of 3% to 4% over last year’s number.
But Americans aren’t just buying gifts. They’re also opening their wallets to charities and taking holiday trips. And scammers are noticing. As more people choose to shop virtually, online scams have become rampant.
About half of consumers who said they’ve been targeted by an online holiday shopping or phishing scheme ended up getting scammed, according to a new survey by Norton, a seller of cybersecurity software. Respondents who fell victim to scammers lost an average of $1,500, it said.
And the shopping risks don’t end there. Even after you’ve safely made a purchase from a legitimate seller, who has properly packaged up and sent your items, you can still be disappointed. A Security.org survey conducted in October found that roughly 44 million people had reported stolen packages in the previous three months. More than $8 billion worth of merchandise has been taken by porch pirates over the past year, according to company estimates.
5 Holiday Scams To Watch Out For
Fraudsters don’t take holiday breaks, but by being vigilant, you can protect your money, your purchases and your identity from being stolen during the gift-giving season.
Here are some common scams and how to avoid them.
1. Ads on social media platforms
One fast-growing online shopping scheme involves advertisements on social media sites. Over the past couple of years, Americans lost $2.7 billion to social media scams on sites like Facebook and Instagram, according to a recent Federal Trade Commission report. Many of these fraud complaints (44%) involved consumers who purchased a product or service through an ad on a social media site but never received what they bought.
- Solution: Rather than buying a product through the ad on social media, find the company online at its real IP address and see if it’s offering the same item and price as advertised. You can also look for a similar product on a more trusted site like Amazon or at big retailers like Walmart and Target, where you can opt for an in-person pickup.
2. Package delivery theft
Having a package stolen is always a headache, but can be especially rough in November and December. About 18% of people polled by Security.org said a package that was stolen from them contained a gift for someone else. Those packages tend to contain more valuable items that may be harder to replace—especially in time for holiday giving, the survey found.
- Solution: Install a security camera in the area where your packages are delivered. It can act as a deterrent and help authorities catch whoever is responsible if they’re taken. If you’re worried about packages sitting outside your home, have parcels delivered to a more secure place like an Amazon locker or your office, or to a friend or family member who can be present for delivery. If the package contains an expensive item, you might also consider paying a bit extra for shipping insurance or to require a signature for delivery.
3. Gift card scams
Gift cards are a convenient way to give during the holidays. Watch for outlandish fees that can add to the purchase price or drain your card’s value.
In one common credit card scam, someone claims to be a family member or friend who needs money and insists that you give it to them in the form of a gift card.
- Solution: If someone demands to be paid with a gift card, assume it’s a scam and refuse, the FTC says. When you do purchase gift cards, try to do it in person at your financial institution, a grocery store or another retailer to ensure they are legitimate. But be mindful of the fees. The fee amount should be printed on the packaging, or the retailer should be able to tell you when asked.
4. Charity scams
Americans tend to give more to charities during the holidays, when they are feeling generous, or when they want to get tax deductions before the end of the year. Scammers try to take advantage of this through fake online charities. Some call you by phone to request a donation or thank you for a nonexistent donation and then ask for the payment.
- Solution: It’s best to stick with well-known charities or groups you have successfully donated to in the past. You can also research any charity online through websites like Charity Navigator or use the IRS tax-exempt organization search. Do not give money to anyone who calls unsolicited and demands immediate payment. A legitimate charity will take your contribution at any time. And do not donate money by gift card, cryptocurrency or wire transfer.
5. Vacation rental scams
Travel scams are common during this time of year as families seek out vacation spots to celebrate the holidays together. Fraudsters will post beautiful rental properties online that don’t actually exist or market a “free” vacation that actually comes at a hefty price. Once you show interest, they often try to get you off the app to communicate with them directly and submit payment, reducing traceability so it will be difficult to get your money back.
- Solution: Always book vacations through known travel sites like Expedia, Priceline and VRBO. Keep the conversation and transaction within the app. You can also book your trip with a travel credit card, which offers more protections, and consider travel insurance in case there are delays or cancellations during your trip.
What To Do if You Fall for a Scam
Millions of Americans fall prey to scams every year, and the scammers get smarter as technology advances. You may want to exercise a little extra care by using a credit card with zero fraud liability or signing up for a good credit monitoring service to watch out for unauthorized charges.
If you become the victim of a scam, don’t be ashamed. But do report it. There are a number of ways to report theft and prevent it from happening again.
Contact your bank and retailer
If you made a purchase, were notified that your package was delivered and then never actually received the package, contact the retailer immediately to see if the company can resend the item or refund you. Most retailers and popular e-commerce sites like Amazon will work with you to track down the package, send another one or offer a credit or refund.
If that does not work or you’re concerned it’s a scam, quickly get in touch with the financial institution that issued the card you used for the purchase. They can help you dispute the payment and stop other transactions that the scammer might attempt with your account information.
Related: Best Banks of November 2023
Report scams to the regulators
Federal regulators including the FBI, the FTC and the Consumer Financial Protection Bureau provide complaint portals for consumers to report suspected fraud and other schemes. Because these agencies also have enforcement authority, they can cite companies for wrongdoing and require compensation. You can also report a company to the Better Business Bureau, which has a scam tracker.
More From Advisor
- Bilt Adds Marriott Bonvoy As Its Newest Transfer Partner
- Is The Amex Concierge Better Than The Chase Concierge?
- Expect These Best Credit Cards To Perform Well Again In 2024
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
