Fraud doesn’t take a day off, and those holiday scams become more prevalent during the season.
“Whether in stores or online, fraud criminals up their game when we up our shopping during the holiday season,” said Kathy Stokes, AARP Director of Fraud Prevention programs.
“Unfortunately, scams are an all-too-real truth of the consumer experience today. Knowing the warning signs is an important first step to spotting and avoiding these schemes.”
Fraud Report Highlights Ways Scammers Target Shoppers
A new AARP Fraud Watch Network report highlights the ways criminals may target holiday shoppers this year in holiday scams.
The AARP Fraud Watch Network is a free resource that equips consumers with up-to-date knowledge to spot and avoid scams and connects those targeted by scams with their fraud helpline specialists who provide support and guidance on what to do next. Anyone can call the helpline at (877) -908-3360.
According to the report, three out of four U.S. consumers have experienced or been targeted by at least one form of fraud that can be tied to holiday scams, including end-of-year charitable donation requests (39 percent), purchasing an item through an online ad (35 percent) and receiving fake notifications about shipping issues (29 percent).
“It (fraud) is a massive problem,” Stokes said. “We are at a crisis level of fraud victims and fraud losses in this country.”
Stokes said younger adults report fraud losses more often than seniors.
“But when the older adult is the victim, they lose so much more money, and it is enormous problem,” she said. “It can be billions of dollars. We just don’t know because it is mostly on people reporting. We just don’t report. We try and the police say it isn’t a crime or we don’t know who to report to, or we are ashamed because we feel it is our fault.”
AARP Survey Highlights Fraud Tips
To gain insight into consumer awareness of safe shopping practices, survey respondents were asked to answer a series of related questions.
Only 22 percent of respondents were able to correctly answer at least seven of the nine questions, highlighting the need to broadly share safe shopping tips this holiday season to avoid holiday scams. The AARP report says that consumers should know that: Clicking on online ads or on links from emails and texts is fraught with risk; type the web address of the site you wish to visit into your browser directly.
Retailers will never contact you about a “problem” and request your login information; the safest way to use peer-to-peer (P2P) payment services is with trusted contacts; credit cards have more consumer protections than other forms of payment, and updating your device and antivirus software when prompted is critical to protect against scammers.
Use Caution When Making Online Purchases
The AARP report says holiday shoppers should use caution when making online purchases. Over two-thirds of those surveyed said they shopped online last holiday season, with 21 percent of total shoppers saying they will go online, even more, this holiday season.
Scammers can purchase online ads that appear to be legitimate retailers, but instead connect to criminals looking to steal sensitive information and money.
P2P payment services are increasing in popularity, with 53 percent of users saying it is likely they will use one this holiday season, up significantly from 45 percent in 2021. These apps can provide fraud criminals an opportunity to take money with little to no way for a consumer to get their money back.
Gift cards continue to be popular with 67 percent of those surveyed planning to purchase one this holiday season.
An increased risk comes with the increased popularity – 26 percent of respondents said they have given or received a gift card with no balance.
Criminals manipulate gift cards on racks and can also use software to look online for activated cards with balances. It may be safest to purchase a gift card directly from the card issuer’s website versus purchasing off a rack at a physical store.
Criminals Can Also Target a Shopper’s Shipping Experience
Nearly a third of those surveyed have experienced a scam in which someone fraudulently claimed to be from USPS, FedEx, or UPS.
Consumers should connect directly with the retailer or shipping carrier instead of clicking on a link from a text or email claiming a shipping issue has occurred.
“Quite often those links are fake and take you to a website that looks exactly like what you would expect Amazon to look like and the product never comes,” Stokes said.
Phishing Scams Target Consumers
Phishing scams are one of the most widespread types, as they have made their way to every corner of the globe via the internet and email servers, according to Scam Detector, Inc.
Scam Detector is the largest fraud prevention resource in the world and is operated by a full team of professionals providing the best safety measures, along with their world-class partners.
What is a Phishing Scam?
Phishing is a type of fraud that tries to get information from a person such as their email address, phone number, or Social Security number. The information is used for a variety of purposes, including organized crime and, identity theft, among others.
The most common form is an email phishing scam, typically offering something enticing such as free money, but requires some information to get it to you. The money never arrives, and your information has been stolen.
New Phishing Scams Have Arrived
New scams emerge all the time, such as an Apple phishing scam and, scams related to PayPal.
Even the largest commercial website isn’t immune to fraud, as several Amazon scams exist. There are multiple types of schemes, including on the site itself and scams claiming to be associated with Amazon.
Seller fraud is one of the most common types of Amazon scams, including sellers that don’t fulfill orders or dealers posing as manufacturers.
Other common scams include Amazon scam email campaigns, promising rewards, or claiming to be from the company. Amazon gift card scams, Amazon credit builder scams, and Amazon gift cards or credit cards are also pervasive.
The Pandemic Changed the Way Shoppers Purchase Amidst Holiday Scams
Sorin Mihailovici, Editor in Chief of Spam Detector, Inc. said the COVID-19 pandemic changed the fraud game.
“Since March 2020, many stores have closed their doors shifting the typical commerce to online shopping regardless of the industry or niche,” he said. “That created a substantial increase in online fraud, especially since most people were not yet tech savvy or ready to explore the online option.”
He said as a result, not only are scams happening year-round online, but when holidays come, it’s crazy.
“Everybody turns to online shopping and November and December are the most dangerous months of the year,” he said. “It starts with the fake Black Friday deals and continues all the way to Boxing Day when millions of dollars are wasted on fraud while victims keep waiting for items that never existed in the first place.”
Mihailovici said there are many ways to detect red flags or suspicious websites, including but not limited to:
- If the site has grammar mistakes
- If the site has pages with awkward verbiage
- If the deal seems too good to be true
- If the site doesn’t show who is behind the platform (Meet the team kind of page)
“However, the best way to verify if a website is legit or not is to use the Scam Detector’s website validator, where every site is rated according to their trustworthiness, on a range from 1-100,” he said. “You can check it out here: www.scam-detector.com/validator For example, MaverickObserver.com has a rating of 100/100.”
Mihailovici said it is extremely hard or almost impossible to recover your lost funds unless you pay via PayPal or your credit card provider understands the situation.
“The problem is, there are way too many now, so complaints get lost through the cracks,” he said. “Depending on the gravity of the situation or the type of fraud that’s been committed (e.g., eCommerce store scam versus crypto investment loss) there are ways of addressing the issue. It starts with reporting the scam to the Federal Trade Commission link: https://reportfraud.ftc.gov/#/?orgcode=SCAMDET. Then, contact the credit card provider to cancel the transaction or ask for a refund. However, it’s always best to prevent getting to that point by researching the company prior to committing to purchase.”
Phone Calls Still Tool of Choice
Stokes said phone calls are still an easy way for scammers to work.
“Don’t answer phone calls if you don’t know who is calling,” she said. “Anytime somebody is asking you to give personal information, and they reach out to you, just don’t trust it.”
Stokes said scammers have become sophisticated.
“It’s not some guy sitting in his basement making phone calls, setting up fake websites,” she said. “They (scammers) are sophisticated. They have money. They have employees. They are doing this 24-7.”
