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5 things to watch out for during the holidays

(NerdWallet) – On the list of things you want to do during the holidays, fending off scammers has to be at the bottom. And yet, the holidays can be a prime time for fraudsters hoping to take advantage of the peak season. A fraudulent transaction is easily overlooked on a bank statement full of gift purchases, and you may not have time to dispute suspicious charges when you’re hosting out-of-town guests.

Research consultancy Javelin Strategy & Research defines an identity fraud scam as a tactic used by a criminal to steal a person’s personal information for the purpose of illegal financial gain. Consumers lost $43 billion in 2022 to these scams, according to Javelin’s 2023 Identity Fraud Study.

If there’s any good news, it’s that there were fewer identity fraud victims reported in 2022 compared to 2021, with a 17% decrease in the amount of money lost to scams . The bad news is that fraudsters have become more sophisticated in their methods and have a new tool in their arsenal: artificial intelligence. AI programs can be used to generate fraudulent emails, text messages or audio recordings imitating the speech of loved ones.

Knowing the latest tools and tactics of fraudsters is an effective defense against identity fraud. Here are five credit card scams to watch out for this holiday season.

1. The Amazon scam

Amazon will be the go-to holiday shopping destination for many people. But as our inboxes fill up with order confirmation emails and delivery updates, be careful with messages claiming to be from Amazon. Scammers may contact you via email, text, or phone to try to steal your credit card information. They may tell you that you need to update your payment method to prevent your Prime membership from expiring, or that your Amazon account will be deleted unless you verify your account by providing payment details.

How to fight it: If you are unsure whether an email or text message is legitimate, do not click on any links in it. Instead, log in to your Amazon account and navigate to the Message Center, which contains a record of all Amazon communications. If you are contacted by telephone, do not provide your credit card information. Amazon will not ask for payment information over the phone. And never enter your Amazon payment information on any website other than Amazon.com.

2. The romance scam

The holiday season can increase feelings of loneliness, which can make romance scams particularly effective. After creating a fake profile on a dating site or social media platform, scammers will form a relationship with their victims before asking for money. Common reasons you need money include medical or legal expenses or to finance an investment opportunity. The 2023 Consumer Impact Report from the Identity Theft Resource Center, a nonprofit that helps victims of identity crimes, noted that romance scams consistently report six-figure losses, underscoring the severity of this scam.

How to fight it: If someone you met on a dating site or social media platform asks you for money, search for their name and do a reverse Google search of their profile picture to try to determine if they are hiding behind another person’s identity. Investigate any details that seem suspicious; you don’t have to automatically accept what someone says as the truth.

Don’t give payment details or personal information that could be used to open credit cards to someone you haven’t physically met.

3. The gift card scam

Gift cards make great Christmas or last-minute gifts, but they are also a prime target for fraudsters. The scammer will contact victims by phone, email, or text message and ask them to purchase gift cards, usually as payment for an unpaid bill or as prepayment for a service they are offering to perform.

For example, someone posing as a computer technician claims they can remove a virus from your laptop in exchange for a $100 Amazon gift card. Once the gift card is purchased, the scammer asks for the gift card number and PIN. This way, the scammer doesn’t need to expend any effort to get their hands on the card itself.

How to fight it: No legitimate business or government agency accepts gift cards as payment. Whenever you purchase gift cards, save the receipts and take photos of the card numbers and PINs in case you need to file a report with the gift card company or the Federal Trade Commission.

4. The charity scam

Donations tend to increase between Thanksgiving and Christmas, and some scammers take advantage of the increased spirit of giving during this time. Pretending to solicit donations on behalf of a charity, scammers will ask for donations by phone, email, text or through a crowdsourcing platform. They may ask you to enter payment information on a fake website or provide it over the phone.

How to fight it: When asked to donate, get the name of the charity and the cause it supports. If you’re not sure whether you’re matching with a legitimate charity, take the time to do more research. Search for the name of the charity on a website that reviews nonprofit organizations, like Charity Watch or Charity Navigator.

When donating, pay with a credit card if possible: major card issuers have zero liability policies that give you financial protection against fraud. Payments made in cash, cryptocurrency or bank transfer are more difficult to recover; If you’re asked to donate this way, it could be a sign that you’re dealing with a scammer.

5. The lottery scam

Making money while on vacation sounds too good to be true, and it probably is. In this scam, the criminal claims that you have won a physical or monetary prize, which is yours as long as you make payment or hand over your payment information to cover the processing fee.

How to fight it: Ask for the name of the company claiming you won the contest and contact them to confirm whether or not you are a winner. However, be sure to look up the company’s information yourself rather than using a phone number given to you by the person telling you you won.

A real draw does not require payment; a real prize is, by definition, free and won by chance. You don’t need to send a payment or disclose any personal information to win a real lottery.

How to minimize damage and recover from a scam

Even the most vigilant among us can fall victim to a scam. However, there are steps you can take to minimize the damage and work towards healing.

Prevention: Freeze your credit report with the three major credit bureaus: TransUnion, Experian and Equifax. Fraudsters cannot open a new line of credit in your name while a freeze is in place. You can also choose to receive alerts when there is suspicious activity on your credit card, or even when a transaction is made.

Mitigation: If you think your credit card has been compromised, place a lock on the card so that it cannot be used until you unlock it. Next, call your card issuer – ask for the fraud department, if there is one – and tell them about your concerns.

Recovery: Learn six steps you can take to help get your money and identity back after it’s stolen. For free personalized assistance, contact the Identity Theft Resource Center.


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