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Avoid credit card fraud this holiday season

Cybercriminals are working to steal the holiday spirit from online shoppers, but you can take steps to protect yourself


As online sales soar and supply chain issues reduce inventory, fraudsters are setting up fake websites claiming to sell goods in high demand and trying to steal charitable donations.

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Supply chain shortages and a surge in online shopping, combined with the COVID-19 pandemic, are expected to increase credit card fraud, taking some of the sparkle out of the holiday season.

“Scammers see the pandemic as a once-in-a-generation opportunity to defraud consumers,” says John Breyault, a vice president at the National Consumers League who oversees its program.

Everything from merchandise to shipping to charitable donations are expected to be targets of scammers during the holidays, and much of the fraud is expected to take place online.

Online sales are up, and so is fraud

Complaints about merchandise purchased online are always one of the top complaints made to, Breyault says, and they are even more rampant this year. “Scammers will follow the money,” he says.

Overall holiday sales are expected to soar this year, jumping between 8.5% and 10.5% compared to 2020, according to the National Retail Federation. They are projected to total between $843.4 billion and $859 billion.

As part of that trend, online and other non-store sales are expected to reach between $218.3 billion and $226.2 billion during the holidays, compared to $196.7 billion last year.

In light of COVID-19, many consumers “aren’t going to the mall, they are going online,” says Eric Cole, cybersecurity expert and consultant, and founder of Secure Anchor.

“As the economy comes back after the pandemic, more people are using credit cards,” says Michael Bruemmer, vice president of consumer protection at Experian Consumer Services.

A September poll by found more than 60% of consumers plan to do most of their holiday shopping online this year.

While online spending has climbed since the pandemic began, so have fraud complaints, according to the Federal Trade Commission. Consumers reported 4.7 million cases of fraud, identity theft and other consumer deceptions in 2020, compared to 3.24 million the previous year.

The agency collected more than 393,000 reports of credit card fraud in 2020, compared to almost 272,000 reports in 2019.

Scammers targeting consumers

With the shortages caused by supply chain troubles, many popular gifts and holiday items are hard to come by. Gifts have “become such a scarcity, attackers play off of that,” Cole says, and “desperate people believe and trust.”

Bogus websites have popped up selling counterfeit merchandise or items that are stolen, don’t work or don’t exist. Rather than scammers targeting retailers, experts have seen “large-scale attacks going after consumers,” Cole says.

Often the fake shopping websites will place ads on popular websites or social media sites. While consumers may think they ads are legitimate because they are on sites they use regularly, “They aren’t verified or validated ads,” Cole says.

You also might receive an email or text offering you a gift at a price that seems to be good to be true, Breyault says. If that’s the case “it should raise red flags.”

Fraud related to what IT experts call “social engineering” – manipulating people into sharing confidential information online – always spikes this time of year.

To stay safe, it’s best to avoid shopping on websites you aren’t familiar with, Bruemmer adds.

Delivery scams

If finding the right gift isn’t hard enough, many orders are taking longer to arrive. In recent weeks, scammers have started to take advantage of delivery issues, Cole says.

A shopper might get an email from someone purporting to work for FedEx, UPS or the U.S. Postal Service, saying delivery of their package has been delayed by a few weeks.

The email claims that if the shopper pays $4.99 for expedited service, the package will arrive in time for Christmas. “They play on emotions,” Cole says.

In reality, the scammers want your payment information so they can ring up charges to your credit card.

Charitable donation scams

As consumers feel in the holiday spirit or seek to reduce their tax burden, there’s an increase in charitable giving at the end of the year.

Last year, Americans donated $2.5 billion to charity on Giving Tuesday, which is the Tuesday after Thanksgiving. The donations represented an increase of nearly 30% compared to 2019.

“Unfortunately, scammers take advantage of this,” says Chris Glynn, senior vice president of transformational engagement for World Vision, an international charitable organization.

Glynn cautions consumers to be wary of unsolicited phone calls, emails and texts they may receive asking for donations that supposedly support nonprofit organizations. Some donations wind up in the pockets of scammers.

These cybercriminals also may create fake websites or set up fake links on social media sites “designed to make it easy for victims to give money,” Glynn says.

Often the scammers will push people to make snap decisions to make a donation.

If you are interested in donating to a charity you’re unfamiliar with, he advises taking the time to verify the organization through sites such as Charity Navigator, the BBB Wise Giving Alliance and GuideStar, he says.

“It’s important to make charity donations with the same intentionality you do anything else you do in your life,” Glynn says.

How to use your credit card to protect against fraud

Whether you’re shopping or making a charitable donation, using a credit card can help protect you from fraudsters.

“Paying with plastic is going to be the safest way” to pay, Breyault says. He urges shoppers to be wary of sites that want you to pay using gift cards, wire transfers or peer-to-peer payments.

He also recommends making purchases from websites you’ve used in the past.

If you use a credit card and the charges turn out to be fraudulent, you’ll typically face no credit card liability. With the Truth in Lending Act, your liability for unauthorized charges is $50, but most card issuers won’t hold you responsible or the charges.

You also can use a prepaid card, so you are spending money you’ve already loaded onto the card. Once you use up that amount, you have to load more money onto the card, Cole says, so there’s a limit on how much cybercriminals might steal.

Or you can get a virtual credit card, which is a temporary card number that you can use when shopping online, Bruemmer says.

He also recommends checking your credit card statements regularly to make sure you don’t have any fraudulent charges.

You can also set up online tools such as balance alerts that notify if your credit card balance is getting too high, or purchase alerts if the amount charged to your card exceeds a certain amount, Bruemmer says.

It’s important that you protect yourself when shopping this holiday season. Given the huge increase in fraud reports, Breyault says: “I don’t see the number tapering off any time soon.”

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