The last thing you want to get wrapped up in this holiday season is a financial scam. Unfortunately, fraudulent activity tends to ramp up during the end of the year as scammers prey on those looking to score discounts on gifts and travel accommodations, make charitable contributions or seek companionship.
According to a recent AARP survey of U.S. consumers 18 and older, 80 percent of respondents said they have been targeted by at least one form of fraud that ramps up during the holiday season. The report also says that a significant percentage of adults aged 65 and older were targeted by a holiday scam in 2023, at 78 percent.
These high numbers can be alarming; however, you don’t have to shop in fear. Many of these scams have common traits you can identify to avoid them and keep your holidays merry and bright. Read on to learn about seven common holiday financial scams you need to steer your sleigh clear of this season.
Our Top Seven Holiday Scams to Avoid
#1. Look-alike e-commerce (online shopping) websites
As the number of online shoppers grows in the United States, the number of online scam sites also grows. Fake websites can vary in quality and functionality, but the goal is the same: collect personal information or money from unsuspecting users. These websites are at the heart of many digital scams, so you should arm yourself with a few tactics to avoid them.
A few tips the Better Business Bureau (BBB) suggests to identify these scam sites are:
- Carefully review the domain name. Scam sites can’t duplicate the URLs of the entities they are trying to copy, so they tend to switch letters or slightly misspell the URL to trick users into using the site.
- Notice the design quality. While some of these websites can look similar to their legitimate counterparts, many have design inconsistencies or a total lack of design. If anything looks off about the website, double-checking its validity is a good idea.
- Pay attention to the contact information and shop policies. Every legitimate shopping website should have a physical address and phone number you can verify.
#2. Extreme social media ad discounts
Social media can be a gold mine for scammers. An FTC report found that, since 2021, one in four people who lost money in fraud said it started with social media.
Social media fraud ramps up during the holidays, using extreme Black Friday and other holiday sales to entice users. It’s essential to approach any highly discounted item cautiously, especially if it is from a seller you don’t recognize. These ads can lead to fake websites that will offer counterfeit merchandise and/or steal your personal information.
If you are unsure of a social media ad, look up the seller or product advertised in a separate browser. The ad is likely not legitimate if you can’t find the same deal or information on another reputable retailer’s site.
#3. Seasonal job scams
Whether you want extra spending money for presents or are looking to start saving in 2025, a part-time job for the holidays is a great way to earn money to save for your financial goals.
Landing a seasonal job can be competitive, so jumping on an offer from an unknown company may be tempting. Scammers take advantage of the influx of holiday workers by setting up phony job applications to steal personal information or cash from unsuspecting individuals.
The BBB’s tips to avoid job scams include:
- Avoid all employers who ask for payment upfront. Legitimate businesses will not ask you to pay for job supplies, applications or training fees.
- Stay away from jobs that don’t require an interview. Regardless of how formal or informal the company and position are, most companies still hold a formal interview process for candidates before hiring them.
- Approach unrealistic pay with skepticism. Any time you see high-paying wages for simple tasks, it is most likely a scam. Many of these enticing offers are used to poach your information via the application.
#4. Hot toy scams
Toy fads have been part of the Christmas shopping landscape for the last half-century. We all want to get our little ones the latest and greatest toys, which can lead to scarcity. Scammers prey on our fear of disappointing our kiddos by setting up fake websites to sell counterfeit toys or take money from potential purchases.
If you see a website or social media ad that offers a toy at an exceptionally low price from a seller you don’t know, it is probably a scam. Take time to thoroughly research the seller and toy on other retailer sites to see if something doesn’t line up.
#5. “Secret Sister” and other online gift exchange scams
Presenting gifts to loved ones is at the core of Christmas. Gift-giving is closely tied to the parts of our brains that are associated with pleasure, social connection and trust. The “Secret Sister” gift exchange and other anonymous online gift exchanges look to take advantage of this feeling by offering a place for you to give a gift to a stranger and, in return, receive one or multiple gifts back.
While this type of exchange can sound harmless at first, they are used to steal personal information and receive goods from unsuspecting individuals. The BBB describes these exchanges as illegal pyramid schemes. If you see any online exchange asking you to send gifts or money to strangers in exchange for more gifts in return, report the post to the platform you are using immediately.
#6. Fake shipping or “unable to deliver” messages
With online shopping reaching its peak during the holiday season, we tend to pay extra attention to ever-important delivery dates to ensure our gifts arrive in time for Christmas. The desire for timeliness presents scammers with a new way to instill fear in the hearts of shoppers nationwide with fake “unable to deliver” messages.
This scam is a variation of the phishing and smishing scams you may see throughout the year. The scammer pretends to be the United States Postal Service or another shipping company, claiming they can only complete a delivery once you fill out an online form. The email or text will include a link to a malicious site to try to steal personal information.
It’s easy to get panicked when you think your gift will not arrive on time, but you shouldn’t click on links from senders you don’t recognize. Always double-check the number or email address that sent you the message before clicking a link and check if it matches the official contact information of your local post office.
You can also return to the retailer’s website to check your order status. If there are any problems, they should be noted on the retailer’s site or the shipping company’s official customer portal.
#7. Charity scams
Unfortunately, scammers take advantage of people’s goodwill during the holiday season by posing as a charity or person in need. Four critical signs that a charity is not legitimate are:
- The organization pressures you into making donations.
- The charity wants to be paid in cash or via wire transfer.
- No specifics are offered about how money is used.
- Promises of sweepstakes if you donate.
It’s critical to research any charity before donating or offering payment information. Third-party charity watchers can be a great place to find more information.
And a final note, anytime you are asked for payment in gift cards, it’s probably a scam and should be avoided.
What You Should Do If You Are the Victim of a Holiday Scam?
While you can do everything possible to avoid scams this holiday season, you may still fall victim to one. If you do, there are a few steps you should take to cut off fraudulent activity:
- Notify your card issuer of the situation immediately.
- Contact a major credit bureau and request a freeze on your credit report.
- Call the police and file a report.
As your local mid-Missouri financial institution, we want you to have a safe and fun holiday season. If you ever have questions about potential financial scams, Christmas Club saving or other holiday financial topics, feel free to contact the team at Community Point Bank for more information.
