‘Tis the season…to get scammed

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Scams that rob consumers of their money are a year-round danger, but organizations that track scams and educate consumers about fraud are making an extra effort to do so during the holiday season, when online shopping spikes.

The Federal Trade Commission, Better Business Bureau and AARP Fraud Watch have all issued consumer alerts focusing on scams that are prevalent during the holiday shopping season.

With the increase in online shopping – nearly 60 percent of consumers plan to shop online this holiday season – scam opportunities have increased as well. 

The BBB has found that scams perpetrated online have risen 87 percent since 2015. In figures compiled from reports to the BBB Scam Tracker, released in October, the BBB found 55 percent of scams reported so far this year originated online (including social media and email). 

Online scams that began on the phone, with either a call or text, accounted for 35 percent. Texting is growing as a scammer’s first-contact tool. Those who were contacted on the phone in 2022 were most often contacted by text message, rather than a phone call. The median amount lost so far this year by victims of a scam that started with a text message is $800.

Reports to the Better Business Bureau Scam Tracker show the increase in online-generated scams in the past seven years. Image/BBB Institute for Marketplace Trust

While complete 2022 numbers won’t be released until early next year, consumers were scammed out of $5.8 billion in 2021, up $2.4 billion from the year before, according to the FTC, which compiles statistics reported by consumers to the FTC Report Fraud site, as well as to the BBB, Consumer Finance Protection Bureau, FBI, local law enforcement and other sources.

AARP’s Fraud Watch Network report found that only 22 percent of consumers 18 and older in a recent survey could correctly answer seven or more true/false questions about online shopping safety. Questions included things like whether ads on social media are trustworthy (they aren’t), whether Amazon or other online retailers will ask for your log-in information if you contact customer service (they won’t), whether peer-to-peer payment apps like Venmo have the same protections credit cards do (they don’t), and more.

Of the 5.7 million fraud reports compiled in the FTC’s 2021 Consumer Sentinel Report in 2021, 41 percent were from people age 20 to 29, a number that’s increased with the uptick in digital and online scamming.

Most people never recover the money they’re scammed out of, and most scammers aren’t caught.

With that in mind, here are some of the most common scams consumers are being warned about, and what to do to avoid them.

Gift Card Scams

Gift card scams are on the rise, and few people who are scammed this way get their money back.

The FTC, in a Dec. 5 consumer alert, said, “Scammers want you to pay with gift cards because they’re like cash: once you use a gift card, the money on it is gone.”

Gift card scams come in many forms. The scammer may pose as a government agency or organization, saying you owe money; it could be someone pretending they’re a family member or friend in trouble; they may say you’ve won a prize, but you need to pay a fee first; they may ask you to be a secret shopper, and you need to use gift cards as part of the job. 

If someone you don’t know is asking you to buy gift cards, asks you to provide the number on a gift card, or has you pay or supply gift cards in any way, it’s almost certainly a scam.

The FTC says red flags include:

  • The caller says it’s urgent and pressures you to act quickly, so you don’t have time to think or talk to someone you trust.
  • The caller tells you which gift card to buy – Google Play, Target, iTunes, etc. — or sends you to a specific store like Walmart, Target or CVS, or tells you to buy cards at several stores, so cashiers won’t get suspicious.
  • The caller asks for the gift card number and PIN.
BBB scam tracker what was lost
Reports to the Better Business Bureau Scam Tracker show it’s more than money that victims of scams lose.  BBB Institute for Marketplace Trust graphic

You can also be victim of a gift card scam by just buying one off the rack at a store, AARP reports. Scammers record the card number and PIN on gift cards, then cover it back up, and wait for someone to buy it and activate it. When the card is activated, the scammer drains the money from it. Cards that are bought electronically are subject to a similar scam. 

That’s a concern, given that 58% responding to AARP’s survey said they plan to buy gift cards this year. AARP says that 26% of consumers have given or received a gift card with no balance. Those who tried to recoup the money from an empty gift card were told there was nothing that could be done.

The BBB highlights yet another gift card scam, this one involving phishing (scammers asking for personal information). Scammers send emails offering “free” gift cards if you provide information. The scammers may pose as a legitimate company, like Starbucks, and promise gift cards to loyal customers that have been supporting their business throughout the pandemic or something like that. They may also do it with a pop-up ad or text message with a link saying you were randomly selected as the winner of a prize.

AARP interractive fraud map 12 months
AARP Fraud Watch Network’s interactive map shows scams reported by AARP users in the Manchester area. Image/aarp.org

To avoid gift card scams: 

  • Don’t click on anything having to do with unsolicited gift cards.
  • Don’t buy gift cards at the urging of anyone you don’t know. (The IRS will not ask you to buy a gift card to pay your taxes, for instance). 
  • If you buy a gift card off a rack at the store, examine it carefully for tampering. Better yet, physically buy gift cards from cashiers at the store the gift card is for.

Imposter Scams

Scammers often are successful because they pose as an organization, business or person that the victim trusts. Of those reporting scams to the BBB in 2022, 82 percent of those who reported to the BBB they lost money in an online scam this year lost it to some form of imposter scammer. Of those, 50 percent said the scammer impersonated a trustworthy business, 12% said an employer or job recruiter, 11% said puppy breeder, 9% said certified professional and 7 percent said government agency, 5 percent a relative and 2 percent a love interest.

To avoid imposter scams: 

  • Be skeptical about anyone who reaches out to you unsolicited. 
  • If there’s allegedly an issue with one of your accounts, call the customer service number on the actual website or your bill. 
  • Ask for verification, and check it out using legitimate sources – the BBB points out that impersonation scammers are great at faking official seals, fonts, websites and more. If there’s a BBB accreditation, check out the business with BBB.org. If the person says to call his boss, and gives you a phone number, that can be faked, too.
  • If you can’t legitimately verify, don’t do business. 
  • Grammar and punctuation mistakes, all caps, weird symbols and more are all signs it’s not a legitimate business.
  • Check email addresses carefully – they may look legit, but be off in a minor way.
  • Never allow anyone to pressure you into something you’re not sure of.

Online Shopping Scams

During the holiday season, it may be tempting to buy that hot, must-have item that everyone is out of when you see it on a website or in an ad, especially for a great price. But hold off and do your research – that kind of bait is a favorite with scammers this time of year.

Online purchase scams make up 30 percent of all scams reported to the BBB so far this year, with 71.6 percent of those who are victims losing money.

The most common product that lures those who fall for these scams are pets and pet products, followed by digital devices, then motor vehicles.

Of those who ended up getting scammed, 22 percent said they felt something wasn’t right, but continued anyway. 

The median amount people lost through online shopping scams so far this year is $670. Of those who lost money, 48 percent of people who paid with a credit card reported getting their money back. The success rate drops after that: PayPal (30 percent), bank account (12 percent), and zero for those who paid using Zelle, a prepaid card or gift card or wire transfer.

Online shopping scams can take a lot of forms, from fake websites, to not delivering the product, or delivering a fake or poorly duplicated product, added fees and costs, and more.

To avoid online shopping scams:

  • Don’t buy anything through an ad, which may be a phishing scam to get payment information. If it’s a known seller, buy from their actual website.
  • Always use a credit card when buying online.
  • If you need customer service, don’t Google it and click on an ad, go to the product website, or find it on your receipt or bill.
  • If the deal looks too good to be true, it probably is, particularly if it’s the season’s hot must-have item and it’s impossible to find anywhere else.

Fake…Well, Everything

There are more fake things created by scammers this time of year than there are fake Santa beards.

People are much more likely to get scammed now that phones, apps, and online buying and interacting are such a big part of life. Be vigilant about anything you click on. 

Here are some of the top fake things looking to draw you in this holiday season:

Fake Social Media Gift Exchange: Wine, “paying it forward,” secret Santa dog – you name it, there are a lot of fake gift and “feel good experience” exchanges. The scammers have you submit your email, or “buy” a gift for someone else, or some other trick that’ll take your information or money. If you’re not familiar with the source, don’t get drawn in.

Fake holiday apps: Free apps that allow your kid to “talk to Santa,” light a menorah, submit holiday wish lists and more may be phishing scams or have malware. Even legit ones, if they’re free, may have loads of pop-up ads or upgrades that will cost money or, in some cases, link to malware or phishing. The BBB recommends reviewing privacy policies, checking reviews and looking carefully before installing a holiday app.

Fake Charities. If you’re inclined to make a charitable donation, keep an eye out for unfamiliar organizations, as well as ads and solicitations that may be for familiar ones, but are fake. Donate to the charity’s actual website using a credit card. If you are not familiar with the organization, verify it through the BBB’s give.org or some other reliable source. If you can’t, give to someone else you can verify.

Fake Delivery/Shipping Notifications. Something that looks like a shipping or delivery notification from a carrier like FedEx, UPS, USPS or the company you bought the item from may be a fishing scam, or an attempt to defraud you by asking for additional shipping fees. Don’t click. Instead, go to the website where you made the order, find your order information, and access its tracking info to make sure everything is going all right.

Fake Pop-Up Holiday Virtual Events. Scammers are taking advantage of the increase in virtual events over the last two years to create fake event pages, emails, and social media posts, according to the BBB. Before you provide credit card information online for an admission fee, confirm with the organizer of the event. If it’s an event you’re unfamiliar with, make sure it’s legitimate before providing credit card info. Some events, even if they’re free, ask people to register. Be wary of what information is asked for and don’t be afraid to contact the organizer if it seems like it’s too much for a free event.

Fake compromised account alert. If you get an email, text or call saying your Amazon, PayPal, Netflix, Facebook or bank account has been compromised, it’s likely a scam. The message will say there’s been suspicious activity on your account, and you must take immediate action. This fishing scam can drain an account if it’s one connected to a bank or credit card account. If you get such a message, find the customer service contact information on the company’s actual website or your bill, and call that number and speak to a human being to find out if the message is legit. Most of the time, it won’t be.

What to do if you’re scammed

If you are the victim of a scam, report it to local law enforcement, the BBB Scam Tracker and FTC Report Fraud. None of that is likely to get you your money back, but the more information those organizations have, the more they’ll be able to crack down.

If you were scammed while using your credit card, report it immediately to your credit card company. You may get reimbursed or the scammer may be blocked from accessing your money. If it was your debit card, or an online bank, report it to your bank as well, though the odds of getting your money back are lower, since debit cards and online banking don’t have the same protections credit cards do.

The same goes for Venmo, Cash App, Zelle and any other money-sharing app – once your money is gone, it’s usually gone.

The BBB found that while 56% of those scammed this year reported losing money, 31% also reported losing confidence and emotional well-being. But those who are scammed are in good company – it happens to smart people every day.

The AARP Fraud Watch Network, which has extensive consumer fraud education information, including an interactive map and a podcast, says knowledge is power when it comes to avoiding fraud.

“The all-too-real truth in the U.S. today is that fraud permeates every consumer experience,” the organization says in its 2022 holiday online fraud report. “Fraud criminals up their game when we up our shopping over the holiday season, whether in stores or online.”


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About this Author

maureenmilliken

Maureen Milliken

Maureen Milliken is a contract reporter and content producer for consumer financial agencies. She has worked for northern New England publications, including the New Hampshire Union Leader, for 25 years, and most recently at Mainebiz in Portland, Maine. She can be found on LinkedIn and Twitter.