Tis the season for hackers, fraudsters, and identity thieves. Forty percent of each year’s online fraud occurs during the months of October, November, and December. While it is imperative to be cautious of fraud year round, now is the time to be extra vigilant about protecting your personal and financial information. Here are a few reasons why holiday fraud is so prevalent:
- With more people turning to online shopping for gifts and holiday purchases, there are simply more opportunities for fraudsters to hack personal information.
- Caught up in the rush of the season, shoppers are more likely to click links that promise great deals. Hackers create apps or set up fake deal websites and attract shoppers by promising a bargain (often through email). When you click the link or download the app, you end up downloading malicious software which compromises your computer or phone.
- With the introduction of chip technology in 2015, it is more difficult to steal credit card information from in-store computers. This is driving criminals to conduct their fraud online where the chip technology doesn’t affect their ability to grab credit card information.
There are a variety of behaviors that increase your risk of becoming a victim of fraud, particularly holiday fraud.
- Donating to charities without confirming their credibility. Seventy percent of those donating to charities don’t even ask what percentage of their donation goes to the charity.
- Reusing the same username and password on multiple sites.
- Saving your credit card information on retailer sites when making purchases.
- Purchasing gift cards from potentially risky locations. Gift cards purchased off the rack at the grocery store are more prone to fraud than gift cards purchased from an online retailer.
- Shipping and receiving packages without requiring signatures.
- Shopping when you are particularly vulnerable, such as during times of illness, loneliness, or financial difficulty.
- Using debit cards rather than credit cards, particularly for online purchases.
- Using unsecured public Wi-Fi when shopping or checking bank accounts.
Avoiding Holiday Fraud
Monitor your bank accounts. Don’t wait for your monthly account statements to arrive to monitor your accounts. Utilize online banking to check your bank accounts and credit cards several times a week for suspicious transactions. If you check your account every few days, you will have fewer transactions to review than if you wait until your monthly statement is available, and you will be able to deal with any fraudulent transactions immediately, rather than weeks after they occur. Take advantage of services available through your bank that alert you of transactions (text messages, emails). These services are often customizable so you can be alerted of transactions over a certain dollar amount.
Use credit rather than debit. If your credit card is compromised, the credit card company carries more of the risk. If your debit card is hacked, your hard-earned money is instantly at risk.
Use one card. Limit your holiday shopping to one credit card. This makes it easier to monitor because you only have one card to keep track of. Use one card for shopping and use another card/account for paying monthly bills (utilities, phone, etc.) This will save you from having to update your payment information on all of your accounts if the card you use for shopping is hacked.
Keep your bank up to date. Make sure your bank and credit card issuer have your most up-to-date contact information in case they need to reach you. If you receive a phone call from someone claiming to be your bank, it is best to call them back using the number on the back of your card or on the bank’s website.
Shop wisely online. Visit websites of established retailers. Type the web address directly into your browser, or use a trusted search engine when searching for the retailer’s website. Don’t click links in your email or social media posts to access retailer websites. Only make purchases from websites that you trust, and do not use debit cards for online purchases.
Avoid gift card stripping. Gift card stripping occurs when a fraudster takes gift cards off the rack at the store and uses a scanning device to capture the identifying information on the cards. The fraudster then puts the cards back for an unsuspecting shopper to purchase later. The fraudster can then monitor the card balances and use the card once money has been added to it. Since gift cards are generally purchased in advance of the holiday and people don’t always use them right away, the fraudster has plenty of time to use the balance. Ask for gift cards that haven’t been on the rack. Also, if the identifying numbers / codes are readily viewable, don’t purchase the card.
Protect your debit card. Debit card skimming can occur when a fraudster uses a special scanner to collect digital information on your debit card to make future purchases. The owner has no idea their card has been skimmed unless suspicious charges show up on their card. Often, these skimmers are installed on ATMs and gas pumps, and they are very difficult to spot. One of our Leavitt Group producers recently shared an experience where he and two fellow co-workers all had their debit cards skimmed. They used an ATM in a hotel, and their cards were all compromised with over $4,600 being taken from their checking accounts. After filing a report and working with their banks, they were able to recover their money, but it took some time to get it all worked out. Protect your debit card by only using ATMs that are owned by your bank or other credible banks. Trust your instincts – if something doesn’t look right on the ATM or card reader you are using, don’t use the machine.
Don’t fall prey to charity scams. There is an increase in charity scams during the holiday season with fraudsters playing on the heartstrings and taking advantage of the giving holiday spirit. Make sure your donations are going to a credible organization. Contact charities of your choice rather than responding to unsolicited requests. Consider volunteering or donating to local organizations to directly help your own community.
By taking a few extra precautions and following the tips in this article, you can protect your personal and financial information and avoid becoming a victim of holiday fraud.