The holidays are right around the corner, and with them, lots of new opportunities for fraudsters to take advantage of. From holiday present scams to fake nonprofits soliciting donations — or even holiday travel scams — we’ll cover what you need to keep an eye out for.
According to the Federal Trade Commission (FTC), the number of imposter scams reported between January 2020 and January 2021 has increased nearly 220%. It’s easy to see why. With more people working from home and less face-to-face interaction, it’s even easier for scammers to exploit online buyers. Furthermore, considering how many legitimate charities are active between November and January, it’s not difficult for a few fraudulent charities to slip into the mix.
So, what holiday scams should you watch out for? And how can you avoid them?
1.) Black Friday/Cyber Monday Deals
Online shopping is incredibly convenient, and events like Black Friday and Cyber Monday are staples in the holiday shopping experience. Even so, you should be wary of deals that sound too good to be true. In many cases, they are.
Always consider which company is offering the deal. A well-known, multimillion-dollar corporation can afford to sell valuable electronics like tablets or phones for severely reduced prices. They’ll make up the difference with the sheer volume of orders. A small company or independent seller may not have the same advantage, so be careful if they’re offering the same discount.
As difficult as it is to say no to a good deal, you’re better off making your big-ticket purchases through well-known brands. Also, making purchases through a company’s mobile application, as opposed to their website, can be another safeguard against fraud.
2.) Fake Charities/Nonprofits
When it comes to end-of-the-year giving, there’s no shortage of options. Even so, you want to be diligent. In January of this year, the FTC reported that charity/nonprofit scams were up 155% from January 2020.
In order to avoid fake charities, the FTC recommends starting with an internet search on an issue you’re passionate about plus the key words “best charity” or “highly rated charity.” This will help narrow your search down to some of the best options. Once you’ve zeroed in on three or four nonprofits, do a follow-up search with the name of each charity with the key words “review,” “complaint,” “fraud,” or “scam.” If the charity you’re interested in has numerous negative reviews (and especially if those reviews mention unauthorized money withdrawals or lack of communication), it might be best to donate to a different organization.
If you’re still unsure whether a charity is legitimate, you can check whether the nonprofit is listed on your state’s charity regulation website. Alternatively, you can see if the organization is listed on the IRS’s Tax Exempt Organization Search.
If a nonprofit reaches out to you asking for a donation (by paper mail, phone, email, or face-to-face), here are some things to keep in mind.
- If the nonprofit pressures you to give immediately, just say no. This is a common tactic used by fraudsters that doesn’t give the donor time to research the organization or address any doubts they might have.
- Ask for details on how your donation will be used. If the nonprofit says that the donations are used to “assist single parents” but doesn’t give any details on what they plan to do (for example, organizing a food drive, collecting holiday present donations, offering low-cost childcare, etc.), it might be a scam. A legitimate organization will have a clear plan for using donations.
- Donate by check or credit/debit card, or not at all. If the charity says they can only accept donations via gift cards, cryptocurrency, or wire transfer, then it’s almost certainly a scam. Donations made by check or on a credit/debit card can be monitored and, in most cases, reversed if necessary.
3.) Holiday Travel Scams
Scammers know that many people travel for the holidays and that prices will skyrocket with demand, presenting them with yet another opportunity to make a “quick buck” (or hundreds!).
Keep an eye out for these common travel-related cons:
- The “free” trip: If the company offers a free vacation, but then asks for your credit/debit card information to hold your spot, it may be a scam. A quick internet search with the company’s name and the keyword “scam” or “fraud” will usually confirm this.
- Fake properties: If the rental company is offering their services for a severely discounted price, that should raise a red flag. In most cases, the rental property either doesn’t exist at all or the real accommodations are nothing like the description.
- Phony airline tickets: If you receive an email or text from an airline advertising incredibly cheap tickets, be wary. It may be a fraudster impersonating a real airline. Always double check if the email address and/or website address for the airline is correct, as scammers will typically buy up domains with similar (but not identical) names.
- Speedy passports: Even if you’re in a time crunch to receive your passport, always go through government websites. Competitors may offer faster delivery or a lower fee, but there’s ultimately no way to be sure they aren’t stealing your identity instead of expediting your passport.
At the end of the day, we all want to enjoy a fun, trouble-free holiday season. Remember these tips to bring yourself a little more peace of mind:
- Do your online shopping through a brand’s official website or mobile application.
- Do your research and vet a nonprofit before you donate.
- If you feel pressured to make a purchase or donation immediately, don’t give in. You can always hang up or walk away.
- Steer clear of “free” vacations with hidden drawbacks.
- Stick to official government websites for travel documents.
- If it seems too good to be true, it probably is.
No matter how carefully you plan, there’s no foolproof way to avoid fraud and identity theft. Even online shopping can open you up to identity theft. Learn more about how AAA Identity Champion can help you identify threats to your identity and get your life back in order after a theft.