There are many types of fraud schemes, with new ones invented every day! The holiday season typically brings with it an increase in purchases and financial transactions, which provides a great opportunity for fraudsters to take advantage of unsuspecting victims. This year, with the impact of COVID-19, there is an even greater focus on online shopping, meaning that financial information (such as credit card information) is frequently being transmitted electronically to facilitate purchases. Given the increase in opportunity for fraud, here are some common types of schemes to look out for and some tips and tricks to help protect you.
An Offer You Can’t Refuse
If something looks too good to be true, it probably is. When online deals offer free goodies with a purchase (e.g. “free iPad with this camera!”, “Free Xbox with this cell phone!”, etc) this may be a scam meant to entice you into sharing your payment information. These scams can be a little harder to immediately spot because there really are some great promotions around the holidays, but you can keep yourself safe with a little good sense and homework. The key is to do your research. Do a Google search for the deal and see if it shows up anywhere else.
Phishing schemes often rely on emails with a link to an imitation site pretending to be a trusted business in order to gather your information. Make sure the business is on the up-and-up and make sure the web page you’re looking at is the real one. You can always look at the address in the URL and make sure it directs to the actual business.
Be careful when visiting sites you’ve never been to. If a coupon directs you to a retailer you’ve never heard of, take a second to put them in Google and check up on them. Make sure they’re legit and, again, make sure the coupon offer is directing you to the actual website and not an imitation of the site made to look like the real thing.
Lastly, if a site is asking you to pay in gift cards or some other weird form of payment, don’t bother with it. That’s a big sign that things are not on the up-and-up.
A Failure to Deliver
Another favoured holiday email scam is the false delivery failure message. This scam relies on more people than usual taking advantage of online retailers during the holiday season and the typical shipping issues that crop up during a busy shopping season.
While looking like an official “Failure to Deliver” notice, the email will typically include an attachment for you to open or a link to click on. It will say the attachment or link contains shipping details, recovery info, and/or a refund form to fill out – but what it will really contain is malicious software like malware, viruses, and ransomware (where hackers will essentially lock you out of your own computer and extort you to regain access).
This scam relies on people doing a lot of online shopping and being understandably worried that their gifts won’t arrive on time. Remaining calm is your best defense! If you get a shady shipping error notice, look it over carefully. What does it say was shipped and from where? Did you buy anything that matches that description lately? Slow down and think it through before clicking any links or opening any attachments. You should be careful of attachments and dubious files all year round, but extra cautious during the holidays when online fraud is at its peak!
Free Money and Other Offers
The fake refund scam is one that relies on people being excited to take advantage of any opportunities to help with the holiday budget. This scam has many variations – email, letters, phone calls – but the basic idea is the same: You have a “refund” available to you and all you need to do to claim it is provide them with some confirmation info about your account and identity (which they will then immediately use to defraud you).
While there is always the classic “here is a refund for something you never bought” version, more clever fraudsters try and frame their refunds as the result of a service error. While we may be skeptical enough to not fall for it when someone offers a refund for a tablet or laptop we never bought, the idea of your phone company making a mistake in their last billing cycle is a lot easier to believe. Service providers who may have a reputation for making errors and are often paid through monthly automatic deposits are the perfect cover for a fraudster.
Again, remain calm and don’t jump at the mention of free money (no matter how tempting or appealing the idea might be during the holiday season). Be suspicious and don’t offer any information. Even if your phone company or bank legitimately made an error, they would compensate for the issue with a future billing adjustment instead of asking you for account info so they could send you a cheque or electronic transfer.
Unfortunately, there’s just no such thing as free money – not even during the holiday season.
Counterfeiters can create websites that have the same look and feel as legitimate sellers or retailers in order to sell products at big discounts. Often these products are far inferior in quality and may even come with significant health risks. For example, The Canadian Anti-Fraud Centre has noted counterfeit jackets have been found to contain bacteria, fungus and mildew.
Things to watch for:
- Warnings posted online. Do some extra research online and see if you find any warnings about the seller and/or products
- No customer phone number or email listed on the website is a red flag
- An odd or different name on your credit card statement after purchase
- The transaction is in different currency
- The product packaging has no labels
For more information on common types of fraud and how to protect yourself, visit the Canadian Anti-Fraud Centre.
Some good habits to get into:
Here are some quick tips to help protect yourself you from scams during the holiday season (and year-round)
- Review your credit card statement closely the day it arrives. Make sure you can identify each and every charge on it. If you can’t recognize a business name, or don’t remember where you spent money on a particular day, investigate it.
- If you don’t already have online banking where you can check your statements in real time, contact your bank and have them set that up. Being able to check your bill at anytime will help spot potential fraud issues more quickly. Some financial institutions even offer text message notifications after every credit card purchase in real time.
- If your statement doesn’t arrive, contact your bank, even if you have online banking. Stolen or misdirected statements can be another sign of fraud.
- Keep your receipts and record your purchases. You don’t need to carry around a ledger like an accountant, but a small notebook where you record purchases and incidental costs can help you distinguish between the time you picked up gas with your credit card and a potential scam.
- Try to avoid using your credit card in open locations. Independent ATMs in convenience stores and food courts, gas station pumps, and temporary stalls/merchants are all prime targets for skimmers to compromise. If you have no choice but to use one, record the date and location and be sure to watch your bills closely for the next few months.
- Check your credit report every year and make sure there are no inconsistencies.
The holidays are expensive enough without criminals adding to your bills. While totaling up exactly how much you owe and going over statements might not sound like the most fun way to spend an evening, it could save you from paying a fraudulent charge or help you identify when you’ve falling victim to a scam so you can quickly report it.
Make sure you Report!
Report any charges that seem suspicious immediately. If you suspect you’ve been targeted by fraud, report it! You can contact either the Competition Bureau or the Canadian Anti-Fraud Centre to report a fraud attempt. This is important not only to protect yourself and have a preexisting record of possible fraud if you notice any suspicious activity in your accounts later, but to help law-enforcement track and shut down scammers.
To report a fraud event, there is an online form at the Canadian Anti-Fraud Centre.
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