PRAVEEN LAM: ‘Tis the Season for Holiday Scams

English: Looking northeast at pole dancer at the land end of Pier 17, South Street Seaport on a cloudy afternoon with many Santas. (Photo credit: Wikipedia)

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‘Tis the Season for Holiday Scams

Criminals never take a break in their effort to take what doesn’t belong to them, especially during the holiday season. In recent years, their tricks to steal have evolved to include the convenient online services many of us have come to rely on. According to the security technology firm McAfee’s 2012 Holiday Shopping Study, 70% of those asked said they plan to shop online this holiday season. Knowing where you’re vulnerable, how scams work and what you can do to guard against them are the keys to protecting yourself.

Telemarketing Scams
One of the most successful schemes crooks use is to steal your money is through telemarketing. They entice consumers to respond quickly on some incredible deal that doesn’t exist. After giving your personal information including your credit card information, the crook as everything needed to rack up mounds of debt, open new accounts and steal your identity.

Prevention: Unsolicited phone calls are so fraught with danger that the Do-Not-Call Registry was created to protect consumers. If you register your phone number, only authorized companies and institutions will be allowed to call. Never give your personal information or credit card number to an unsolicited caller.

Classifieds and Auction Scams
With millions of people taking advantage of the cut-rate deals on auction and classified ad websites, it shouldn’t come as a surprise that scammers came up with a way to steal. The scam begins with an ad for an item the crook doesn’t actually have. Once an order is placed, the victim’s credit card is charged for the purchase amount, which goes directly into the crook’s pocket. Then using a separate, stolen credit card the crook charges the actual purchase. The merchant ships the item before realizing that the payment was made on a stolen credit card.

Consumers are victimized twice by this scam – lose the money paid for the fake purchase and being liable for stolen merchandise. A strong indicator that an item may have been purchased with someone else’s stolen credit card number is when it’s delivered by the merchant or retail store rather than from the auction seller.

Prevention: Look for local sellers to conduct business with. Check each seller’s rating and reviews along with the number of sales and whether there have been recent transactions. Be wary of a seller with 100 percent positive feedback and a low number of feedback posts or one with all feedback posted around the same date and time. Never provide financial information directly to the seller, but use a legitimate payment service like PayPal. And never buy if the deal sounds too good to be true.

Shipping Scams
This scam targets holiday shoppers. An email is sent to consumers offering reduced or free shipping through an auction site. They never pay for the actually product but take the money and run. The auction service intercepts the delivery for nonpayment and the victim loses the purchase price without every receiving the goods. Legitimate businesses don’t use email to schedule deliveries or make changes to an account.

Prevention: Be wary of unfamiliar websites or emails offering reduced or free shipping. Always handle your transactions directly through the company websites. Never follow an email link, which could be sending you to a fake site duplicated to appear legitimate.

Gift Card Scams
More than sixty percent of Americans will purchase gift cards during the holidays. There are three tactics thieves use. They may try to sell counterfeit cards, sell cards at a bogus inflated value or resale cards purchased with stolen credit cards.

Prevention: Be wary of buying gift cards online; instead opt to buy from a reputable retailer. Ask the salesperson to scan pre-loaded cards to ensure they are still valid and retain their value. Keep the receipt for all gift card purchases, in case the recipient has a problem with the gift card.

Charity Scams
One of the most despicable scammers are the one who steal the donations intended for the less fortunate. Thousands of charities make special appeals for donations during the holidays. According to Sandra Miniutti, Vice President of Marketing for Charity Navigator, forty percent of charitable contributions are made between Thanksgiving and December 31, giving crooks ample opportunity to set up their schemes. Fake charities are set up to fool unsuspecting people to give with donations going to line the crook’s pocket.

Prevention: Scammers create a sense of urgency for their fraudulent charity, often using graphic photos and a description of the dire consequences if enough funds aren’t raised to prod you to act before you have time to think clearly.

To spot a scam, begin by ignoring solicitations from unknown charities making an appeal by mail, phone or email and on-the-spot donation requests.

Research the charities you’d like to support before writing a check. Make sure that the company has a physical address and telephone number.

Check them out at the Better Business Bureau for real consumer reviews. Visit Give.org for current reports on local and national charities or Charity Navigator to get a clear picture on how well they manage the donations.

To ensure your donation is received, donate in person by visiting the non-profit, mailing a check directly to the headquarters or by donating with a credit card through their secure website.

Remember if it looks too good to be true, it probably is.

Noreen Ruth is a regular contributor to ASAPCreditCard.com and a variety of financial-related blogs and websites. She specializes in credit and debt-related issues and enjoys educating consumers about the latest rules and regulations, as well as ways to build, improve and maintain good credit. Follow her regular posts on the ASAP Credit Card Blog to stay up-to-date with the latest credit card news, reviews, information and more.