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Five Common Holiday Scams and Four Tips to Avoid Them

It’s the holiday season. You might be looking for that perfect gift for a loved one, deciding which charities will receive your year-end donation, or hunting for a seasonal job to make a little extra money. Unfortunately, scammers are busy, too. They are on a mission to con people out of their hard-earned money and steal personal information, through clever and attractive ways that make them seem legitimate.

According to a recent article published by Forbes, the five most common holiday scams to watch out for are:

1) Gift Card Scams: Someone pressures you to pay for something by putting money on a gift card. It might be on behalf of a friend or family member to buy something at a specific store or as a fee to prevent trouble with a government agency. This is something a legitimate business or government agency would never demand that you do. These gift cards are like cash, so once you spend the money, it is gone and cannot be traced

2) Charity Scams: With the holidays being a very charitable time for many, scammers will take advantage of your desire to assist others. They can disguise themselves to be a reputable organization or charity. They will also pressure you to donate immediately before you have had time to research their organization, or they will request payment by a method that is difficult to trace (e.g., cryptocurrency, gift card or wire transfers).

3) Package Delivery Scams: As a result of the pandemic, many of us have turned to purchasing things online and receiving notifications when our order is arriving. However, this can lead to trouble if you’re not careful. Scammers will use fake texts or emails which can easily be mistaken for the U.S. Postal Service or other mail carriers. They might also send a bogus tracking link which, if you click on it, could be used to steal your personal information. In addition, package delivery scams can take the form of voicemail messages prompting you to call back to receive your delivery; the call can result in high connection fees and expensive per-minute rates. The Federal Communications Commission says these fake numbers can start with an 809 area code or other 10-digit international numbers.

4) Fake Gift Exchanges: These scams usually happen on social media and are designed to trick you into participating in a gift exchange with someone. The scammer will ask you to donate a small amount of money, and in return you will supposedly receive tons of gifts. The Better Business Bureau warns of the “Secret Sister” gift exchange scam. It is one of the most common and asks you to send a gift, provide your name and address and information about your friends in exchange for 36 gifts. Sadly, you are unlikely to see any gifts, and the scammers can take your and your friends’ information and put you on other scam lists or steal your identity. This type of scam is an illegal pyramid scheme.

5) Temporary Holiday Job Scams: Finally, you might be strapped for cash at this time of year and want to pick up an extra temporary job to get your loved ones gifts. It’s natural to flock to seasonal jobs to meet this need and choose one that offers you the most flexibility and the best pay. Scammers know that too, and they use these as great selling points. Two big red flags to look for are unusually high pay and requests that applicants pay for supplies and application or training fees.

Four Ways to Protect Yourself from Scams

Now that you have an idea of the types of holiday scams out there, here are four great tips to protect yourself.

1) Practice Safe Cybersecurity Habits

  • Watch out for suspicious (phishing) emails, avoid bogus websites and be extra careful about what kinds of activities you engage in on social media platforms. Simply clicking on a link or opening an email could put your identity at risk.
  • Never give ANY personal information (e.g., passwords or bank account information) to ANY merchant without properly vetting them.

2) Know the Company You’re Purchasing Products From

  • Check the website URL, and see if it has a phone number. If so, call it to see if it is legit; companies can post false addresses and contact information on their websites. While calling a company is not a surefire way to know if it is fraudulent, scammers usually do not go to great lengths to speak to people directly.
  • Google the company names, and check for any reviews about them. If they don’t have any reviews or they have a lot of negative ones, then it’s best to avoid them.
  • In addition to your Google searches, check out the following websites: A) The Better Business Bureau (BBB): They have an entire database that keeps track of scams. You’ll be able to find BBB-accredited and non-accredited businesses and their ratings. B) The Federal Trade Commission (FTC): The FTC’s scam alert page is regularly updated with blog posts about current scams. You can also enroll in email updates to stay in-the-know about efforts to deceive you.
  • Look for any hint of false advertising and/or representation in a business or organization. For example, a scammer on a marketplace site can easily say they are in the U.S., but they could reveal after speaking with them that they are located in another country. While this doesn’t guarantee they are fraudulent, it is definitely a serious red flag.

3) Think Before You Pay

  • Using a trackable and secure method of payment is critical. ALWAYS avoid using wire transfers, cryptocurrency and gift cards, and if they demand that you use those methods, it is a surefire sign that it is a scam.
  • To avoid seasonal holiday job scams, avoid any company that asks you to pay ANYTHING up front.
  • Vet any charities before you donate. Go to Charity Navigator, a nonprofit website that evaluates charities and provides information on what your donations will be used for.

4) Monitor and Track Everything

  • Keep a record of tracking numbers, and monitor the shipment process frequently.
  • Check your bank account or credit card statement frequently — not only to see if the purchases were made, but to verify a merchant’s contact information. 

Overall, when it comes to scams like these, the old saying goes, “If it seems too good to be true, is probably is!”

LSS Financial Counseling has certified, experienced counselors who can provide advice and information about scams and how to avoid them. Call 888.577.2227 to schedule a free, confidential phone or virtual appointment, or get your support online. We also have a web page that describes scams that can happen any time of year and tips to protect yourself.

Here are several sources that were used for this article and are good resources for additional information:

Ray McCoyAuthor Ray McCoy is a Certified Financial Counselor with LSS Financial Counseling.