Fraud & Scams

How to Avoid Holiday Scams

Donna Freedman
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Donna Freedman
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November 11, 2022
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How to Avoid Holiday Scams

The holidays can be the most wonderful time of year … for scammers to take advantage of consumers. 

That’s right, scammers don’t take time off during the holidays. They use them to their advantage. All the bustle and excitement can distract consumers from using their best judgment. Plus, the desire to give great gifts or find affordable travel and accommodations can make people more vulnerable.

So it’s important not to let your guard down during the holidays. Here are common holiday scams to be on the lookout for and what you can do to avoid becoming a victim. 

Beware of holiday shopping scams

Not surprisingly, many scams focus on holiday shopping. According to the National Retail Federation, Americans are expected to spend up to $960.4 billion for the holidays—and scammers want a piece of the action. 

Thieves lure unwary shoppers by impersonating (“spoofing”) existing retail sites or by promoting fake deals on social media. Unsuspecting consumers, looking to save money, wind up paying for items that are never shipped. This also opens them up to credit card fraud.

One particularly mean-spirited holiday gift scam is the “letter from Santa.” Reputable companies do offer personalized letters from St. Nick. However, scammers create fraudulent websites promising custom letters to get not only your payment information, but also personally identifying information about your grandkids. This leaves them open to identity theft. 

[ See: How to Protect Your Identity Online ] 

Watch out for non-delivery scams

According to the FBI, the most common holiday frauds are non-delivery and non-payment schemes. Combined, they cost consumers at least $511 million last year. It’s likely they cost more because not everyone who’s been scammed will report the crime.

A non-delivery scam happens when crooks advertise great deals on toys, gifts, travel and other things important to the holidays. As noted above, this could mean spoofing a known retailer’s site to make consumers think they’re buying safely.

Needless to say, these great deals are never delivered, but the crooks have your money and your credit card information—unless you used another form of payment. Some scammers request payment through prepaid gift cards. Once you’ve provided them with the card number and PIN, they use it for themselves and never send the item. 

A truly great deal can be hard to resist. But as the FBI website notes, “If it seems too good to be true, it probably is.”

[ Find Out: How to Avoid Gift Card Scams

Avoid paying now, getting nothing later

Non-payment scams prey on those who sell things at online auctions or on sites such as Craigslist and Facebook Marketplace. Some people sell items year-round to make a little extra money, and the holidays are a time when additional cash can be particularly important. Scammers know this and prey on sellers in several ways:

Asking to use a mobile payment app. Scammers send a fake payment notification to the seller, gambling that the item will be sent before the seller realizes they’ve been ripped off. Or they’ll claim they accidentally paid twice through a mobile app, providing one of those fake payment notifications as “proof,” and ask for a refund of one of the payments.

[ Read: Don’t Fall For Zelle Scams ]

Bad check overpayment. The thief offers to send more money than the asking price and requests that you deposit the (counterfeit) check and refund the difference. Your bank or credit union is required to make the money available quickly, and it takes time for it to realize the check was bad. When that happens, you’ll be required to repay the entire amount.

Verification code scam. The “buyer” says they’re worried about fake listings and sends a text with a Google Voice verification code so you can prove you’re on the level. This lets them open a Google Voice number that’s now linked to your number. Any future scams will be linked to you, not to them.

Don’t be lured by phishing emails

It’s normal to get more packages than usual at this time of year; they’re either gifts you ordered,or presents someone has sent. Scammers know this and send bogus “missed delivery” notifications.

To get the package, you’re asked to click on a link that leads you to a page that either steals your personal information or infects your computer with malware. A recent AARP survey showed that one-third of its members had been contacted with a delivery scam.  

[ See: What Is Phishing and How to Avoid It ]

Don’t fall for the reshipping scam

This increasingly popular scam relies on innocent third parties to do the dirty work. In some cases, thieves buy items with stolen credit or debit cards; in others, they’re trying to move counterfeit checks or money orders. Next, they recruit people to receive these items and ship them somewhere else.  

Scammers use a variety of tactics to persuade people to do this. Sometimes they tell victims that it’s a way to help out a charity. Victims also are told they’ll be paid to do this as a work-from-home gig. However, the thieves use those counterfeit checks or money orders, written for more than the “salary,” and ask victims to send part of the money somewhere else. By the time your bank informs you that the deposit bounced, you’ve probably already sent the thief their share of the money.

[ Read: How To Spot a Fake Check ]

Don’t fall for Charity scams

Scammers love the season of giving. According to the Federal Trade Commission, crooks will make up names that sound like real charities, hoping that their victims won’t be able to tell the difference. (Think, “Toys for Little Tots” instead of “Toys for Tots.”)

Bogus charity callers insist that victims donate on the spot. (Real charities know better than to push that hard.) They’re hoping that people will be easy to convince after hearing a few fictitious sob stories.

The Federal Trade Commission warns against any “charity” that demands payment in cash, money transfer services, gift card or cryptocurrency. Reputable causes don’t do that.

[ Read: How to Hang Up On Scam Calls ]

How to spot a scam

Unfortunately, cybercrooks are getting much better at what they do. But some of them are just getting started and still make rookie errors. These are common signs of a scam:

Sloppy presentation. If an email is poorly spelled or features incorrect grammar, it’s probably a scam.

Not enough information. A shopping site without a posted privacy policy, a street address or a phone number does not inspire confidence. Having just an email address or a “contact us” form isn’t enough to deserve your trust.

Impossibly great deals. If someone is offering a gigantic discount on serious bling or the season’s must-have toy, ask yourself how that’s even possible. This is especially true of deals on sites you never heard of or that get shared on social media. 

How to avoid holiday scams

Because so many scams originate online, it’s essential to practice what the FBI calls “good cybersecurity hygiene.” Among the FBI’s recommendations:

Never click on a link or attachment in an email, text message or social media site. You’ll either end up with malware or be tricked into giving up personal information that the thieves can use for credit card or identity theft. In particular, watch for emails that say you need to update your account; if that happens, contact the company on your own and see if it sent that request for information.

Verify, verify, verify. If this is your first time buying from a company, check online reviews of other customers’ experience. All URLs should begin with “https”; if you see “http,” don’t do business with that company. When buying or selling through an auction website or online marketplace, read the other person’s feedback rating, I reviews are unfavorable (or if they have no reviews), be extremely wary.

Watch for foreign buyers and sellers. If a buyer asks you to ship in a way that helps them avoid customs or taxes, refuse. And if a seller claims to be a U.S. resident but then claims to be out of the country for some reason, proceed with caution; the person could be based overseas and scamming you from afar.

Make wise payment choices. Always use a credit card for online purchases, and get into the habit of checking your statement regularly to catch fraud quickly. As noted above, never use a prepaid gift card. Don’t wire money directly to the seller, either, because you can’t get a refund if the item doesn’t arrive. 

The bottom line

At such a busy time of the year, it’s easy to be distracted. If you or a relative are tender-hearted and overly trusting, it’s tempting to want to help. And if your parents are on a limited budget, the idea of getting their grandchild the season’s hottest toy at a deep discount may seem like the answer to a prayer.

To keep from becoming a victim, practice the cybersecurity tips noted above. Let unrecognized phone numbers go to voicemail; most scammers will simply hang up.

And if you think the elders in your life are at risk of being scammed, gently suggest they get some help with protecting their finances. A tech-based service such as Carefull could be the answer: You’ll be alerted to any unusual activity, and the family member can maintain privacy.

The holidays should be a time of fun and family. Don’t let thieves ruin your celebration.

[ Keep Reading: 10 Signs You’re a Victim of Fraud or Identity Theft

Donna Freedman

Donna Freedman

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