It’s easy to let your guard down in all the excitement of holiday shopping, which is why the holidays are prime time for scammers.
Online shoppers are especially at risk for fraud. The Deloitte University Press predicts shoppers will spend an equal amount of money online and in brick-and-mortar stores in 2016, with online shopping up about 18% from a year ago.
Here are 5 online scams to watch out for this holiday season:
Americans give the most to nonprofit organizations during the holidays, and scammers are not above taking advantage of your benevolence. Common scams include fake donation calls from groups raising funds for veterans or police and firefighters.
Ensure that a charity is legit before opening up your wallet. If you’re prompted to give to a charity, stay alert for red flags. They may decline to give you concrete information about what the charity does or what exactly your donation would go toward.
Even if you’re sure the charity is legitimate, it may be beneficial to check to see if they will use your money wisely so that you don’t “waste” a donation.
A number of resources exist to help make sure your donation is going where you intend it to go, such as the Better Business Bureau’s Wise Giving Alliance, Charity Navigator, CharityWatch, GuideStar, and the National Association of State Charity Officials.
Coupons and Gift Cards
If a coupon shows up in your inbox that seems too good to be true, it probably is. Many retailers do send out coupon codes or gift cards during the holidays to entice you to visit their websites. Your friends might also send you gift cards via email as gifts. However, if the coupon or gift card seems to be for some outrageous amount or discount, make sure to contact the sender before you click “redeem.”
Avoiding the initial click can help you avoid a phishing scam, which could install malware on your device, or redirect you to a fake site that will ask you for your personal information before you can “redeem” your gift, or both. Don’t take any chances here. You should delete the email immediately if you feel like it’s a scam. If you’re not quite sure, look for the common signs of a scam site, such as a bunch of pop-ups or misspelled information.
As shopping from mobile devices is on the rise, you could also get these offers in text messages. Regardless, a real gift card or coupon will have a code that you can enter during checkout to redeem the gift, and won’t ask you for identifying information to download anything or take you to a series of third-party websites to redeem the code in the first place.
Look out for fake reviews for products on your shopping list. Fake reviews hurt the credibility of websites like Amazon, which is why the company has recently cracked down on the ones that have flooded the platform over the years.
Amazon doesn’t require someone to buy a product to review it, but the company does place a disclaimer next to the reviewer’s handle if it’s a verified purchase. The company has also sued several reviewers, vendors who pay for fake reviews, and the operators of review websites, and has most recently banned incentivized reviews from its website unless they are made through its Amazon Vine program.
The best way to protect yourself is to carefully scrutinize the reviews of a potential purchase. Look for similar wording or several reviews with a disclaimer about getting a free or discounted product. If you’re on Amazon, you can also use Fakespot. The site was created to help consumers identify products with many fake reviews. Just type in the Amazon URL, and Fakespot will analyze the reviews and give you a letter grade that indicates how trustworthy the product reviews are.
With today's technology, all it takes is the proper motivation to develop a fake app or spend hours copying a popular brand’s website to scam their intended consumers. That motivation is easily found in your wallet.
Knockoff websites or apps might use domains or titles that are close to that of the actual retailer, but may be misspelled. For example, a fake app called "Footlocke" attempted to imitate the popular shoe retailer, Foot Locker. A fake retailer might advertise a real brand’s products at an extreme discount. Again, if the deals seem too good to be true, they probably are.
Another thing to check for would be the company’s description and contact information. If it is incomplete, incorrect, or full of typos, you’re probably dealing with a phony retailer. You should also Google the retailer to see if others have been scammed by them.
We’ve reported on the flood of fake retail apps that are hitting app stores this holiday season as well as additional ways to spot a fake app here. For a website, another red flag can be the method of payment the site wants you to use. If the site asks you for direct access to your bank account or to use a money order or wire transfer, it’s probably a scam.
Online Classifieds and Bidding Scams
You can get duped by fraudsters on bidding sites like eBay if you’re not careful.
Scammers may try getting you to make a deal outside of the site altogether. A scammer might claim that someone else won the item you placed a bid on, but the person changed their mind. Now they would like to sell it to you instead. Once you send them the money, however, they disappear, leaving you empty-handed. If this happens, eBay’s money-back guarantee should protect you.
Classifieds, on the other hand, are a bit trickier. Since the sale’s terms are decided between you and the seller, there is a lot of room for scammers to manipulate your trust. They might post a fake ad for something, then never deliver once you send the money. They may also flip roles. Fraudsters may pretend to be buyers, overpay you, then ask for a refund in the difference. If you refund the cash before you realize the original payment never posted to your account, they are gone with your money and you are left owing the bank.
MagnifyMoney is a price comparison and financial education website, founded by former bankers who use their knowledge of how the system works to help you save money.
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