In the United States, the winter holidays might be the most wonderful (and expensive) time of the year. Scammers take advantage of this seasonal spending.
During December, people spend hundreds of dollars on donations and gifts. The National Retail Federation estimated that customers would spend between $800 – $900 to prepare for the holidays. Fraudsters might use phishing emails or texts to convince you to share your bank account or other personal information. Some scammers send text messages or emails pretending to represent actual companies, like Amazon or Apple.
Charitable organizations report that 30% of their donations come in during December. Giving Tuesday often falls at the start of December, which sets the tone for a generous month. Scammers may impersonate charitable organizations to ask for ‘donations,’ but then they pocket your money.
Anyone can fall victim to fraud. One in ten people reports that they’ve been scammed — yet this statistic might not account for the full scale of these financial crimes. Many people stay silent because they feel too embarrassed or ashamed to admit that they’ve been scammed. The Federal Trade Report says that elderly people lose the most money in scams. Some scammers intentionally target senior citizens because older individuals might feel unconfident when using new technology, might struggle to hear clearly when speaking on the phone, or might overlook suspicious fine print when reading documents.
Financial advisors warn consumers to beware of several tricky scams that can leave you with unfilled stockings and empty pockets.
According to the Federal Bureau of Investigation, “Charity fraud schemes seek donations for organizations that do little or no work—instead, the money goes to the fake charity’s creator.” Someone might call you on behalf of a charity that “supports reforestation.” That scammer might pocket most of the donations. In this scenario, very few (if any) trees actually get planted.
If you plan to spread the holiday joy this year, make sure you’re giving to authentic organizations. Do not make your donation by mailing cash or gift cards. Research an organization to make sure that it’s legitimate. Donors can vet charities through the watchdog Wise Giving Alliance. The Wise Giving Alliance was created by the Better Business Bureau, and it curates a database of accredited organizations.
“Secret Sister” gift-giving pyramid schemes
Every year, social media posts invite strangers to participate in a sort of long-distance, Secret Santa gift exchange. The premise is enticing — you sign up to buy an inexpensive gift, and you receive many gifts in return.
However, the Better Business Bureau explains how “Secret Sister” operates with a malicious (and criminal) pyramid scheme model — “You give away your personal information, and you’re left with buying and shipping gifts or money to unknown individuals, in hopes that the favor is reciprocated by receiving the promised number of gifts in return. Unfortunately, it doesn’t happen. Just like any other pyramid scheme, it relies on the recruitment of individuals to keep the scam afloat. Once people stop participating in the gift exchange, the gift supply stops as well and leaves hundreds of disappointed people without their promised gifts or cash.”
Impostors and phony job postings
In the winter months, customers spend more time and more money shopping. Retailers plan for this rush by hiring temporary, part-time workers. The National Retail Federation estimates that for 2022, retailers across the country will hire up to 600,000 seasonal employees.
These job openings are welcome news to people who need to bolster their income. This year, around 1 in 3 people will take on extra work to cover their holiday expenses.
Some scammers may pretend to offer you a chance to pursue a promising new career. If you’re not careful, though, you might put yourself at risk for identity theft and financial losses.
A stranger may contact you on LinkedIn or over email, claiming to be a manager or a recruiter who wants to hire you ASAP. Someone may contact you on social media promising that you can grow your wealth easily, quickly, and passively.
What are some warning signs for a phony job posting? Be cautious of job postings that have very vague responsibilities or undefined working hours. Do not pay fees or promise favors during your application process. Avoid listings that require you to submit your banking or social security numbers through insecure channels like over email or social media. Steer clear of multi-level marketing schemes that assure you more money and more prestige in a company if you recruit other people to join.
Keep tabs on your checking and saving accounts after you make new purchases or give charitable donations, and report suspicious transactions to your bank. When you safeguard your bank accounts and online passwords, you can help ensure that scammers get a lump of coal instead of your money.