5 credit card scams to watch out for this holiday season

Being aware of some of the top credit card scams can help you avoid falling victim to the busy holiday shopping season. getty images

Protecting yourself from scam artists should be at the bottom of the list of things you want to do around the holidays. And yet, the holidays can be a prime time for scammers hoping to take advantage of the busy season. A fraudulent transaction is easily overlooked in a bank statement filled with gift purchases, and there may not be time to dispute questionable charges when you’re hosting guests from out of town.

Research-based advisory firm Javelin Strategy & Research defines an identity fraud scam as a strategy that a criminal uses to steal someone’s personal information for the purpose of illicit financial gain. According to Javelin’s 2023 Identity Fraud Study, these scams could cost consumers $43 billion in 2022.

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

Awareness of scammers’ latest tools and tactics is a powerful defense against identity fraud. Here are five credit card scams to watch out for this holiday season.

1. Amazon Scam

Amazon will be a favorite holiday shopping destination for many people. But as our inboxes fill up with order confirmation emails and delivery updates, be wary of messages that claim to be from Amazon. Scammers may contact you by email, text, or phone in an attempt to steal your credit card information. They may say that you need to update your payment method to prevent your Prime membership from expiring, or that your Amazon account will be deleted until you verify your account by providing payment details. .

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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 into your Amazon account and go to the Message Center, which contains a record of all communications from Amazon. If you are contacted by phone, 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 except Amazon.com.

2. Romance Scam

The holiday season can increase feelings of loneliness, which can make romance scams especially effective. After creating a fake profile on a dating website or social media platform, scammers will build a relationship with their victims before asking for money. Common reasons for needing money include medical or legal bills or funding an investment opportunity. The 2023 Consumer Impact Report from the Identity Theft Resource Center, a nonprofit that helps victims of identity crimes, says romance scams consistently report six-figure losses, highlighting the seriousness of this scam. .

How to fight it: If someone you recently met on a dating website or social media platform asks you for money, research their name and background to try to find out if they are hiding behind someone else’s identity. Do a Google reverse image search of their profile picture. Check any details that seem suspicious; You don’t have to automatically accept what someone says as true.

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Never give payment details or personal information to anyone who could be used to open a credit card.

3. Gift Card Scam

Gift cards make great stocking stuffers or last-minute gifts, but they’re also a favorite target of scammers. The scammer will contact victims by phone, email or text and ask them to purchase a gift card, usually as payment for an outstanding bill or as prepayment for a service they are offering to provide.

For example, a person posing as a computer technician says he can remove a virus from your laptop in exchange for a $100 Amazon gift card. Once a gift card is purchased, the scammer asks for the gift card number and PIN. This way, the scammer doesn’t need to make any effort to obtain the actual card.

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How to fight it: No legitimate business or government agency accepts gift cards as payment. Whenever you buy gift cards, keep receipts and take pictures of the card number and PIN in case you need to file a report with the gift card company or the Federal Trade Commission.

4. Donation Scam

When you’re asked to donate, find out the name of the charity and the cause it supports. If you’re not sure whether you’re connected to a legitimate charity, try doing more research. Look up the name of the charity on a website that vets nonprofits, like Charity Watch or Charity Navigator.

How to fight it: Ask for the name of the charity, then look it up on a charity checking website like Charity Watch or Charity Navigator. Of course, the scammer may pose as an employee of a legitimate charity. If you’re not sure, you don’t need to donate right away. When you’re ready to give, pay by credit card if possible: Major card issuers have zero-liability policies that give you financial protection from fraud. Payments made in cash, cryptocurrency or wire transfer are difficult to recover; If you are asked to donate through those methods, it may be a sign that you are dealing with a scammer.

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5. Lottery Scam

A sudden influx of cash during the holidays sounds too good to be true, and it probably is. In this scam, the criminal says you have won a physical or monetary prize, which is yours as long as you send 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 sweepstakes, and contact them to confirm whether you are a winner. However, be careful to check the company information yourself rather than using the phone number given to you by the person who told you you won.

How to Minimize Losses and Recover from Scams

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Even the most cautious among us can fall victim to a scam. However, there are some steps you can take to minimize the damage and work toward recovery.

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

Mitigation: If you think your credit card has been compromised, put a lock on the card so it can’t be used until you unlock it. Then, call your card issuer – ask about the fraud department, if one exists – and explain your concerns.

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Jay Bratton writes for NerdWallet. Email: [email protected].

The article 5 Credit Card Scams to Watch Out for This Holiday Season was originally published on NerdWallet.

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