The holidays bring joy, time off from work and days spent with family, but they can also be accompanied by added stressors. Whether you're stretching your finances to afford presents, struggling with travel plans or rushing to get everything done before taking a few days off, the extra expenses and pressure could make you a prime target for identity theft or scams.
Scammers are always on the prowl, but the holiday season is especially ripe for identity thieves and fraudsters, who prey on the sense of urgency and scarcity that surrounds online shopping this time of year.
While the dangers are real, there are also things you can do to protect yourself from falling victim to a scam or having your personal information compromised.
1. Practice Caution Shopping Online
Online shopping scams were the riskiest type of scam in 2022, according to the most recent Business Bureau Institute Online Scams Report. Not only are these scams the most common, but they're the most likely to lead to financial loss for their victims.
Follow these tips for avoiding online shopping scams:
- Beware online marketplaces. Practice extra caution or simply avoid shopping on sites like Facebook Marketplace, Craigslist, NextDoor and other online marketplaces. If you're buying directly from a person and paying in cash, you won't have the same purchase protections you'd get when buying from a reputable retailer or when using a credit card.
- Use traceable payment methods. If you're asked to pay using gift cards, cryptocurrency or a wire transfer, that's a red flag that the transaction could be a scam. Instead, it may be better to pay with a peer-to-peer payment app that has purchase protections, such as PayPal or Venmo.
- Look out for "too good to be true" deals. One huge online shopping scam red flag is highly in-demand products at surprisingly low prices. Scammers create websites with realistic listings of scarce in-demand products, such as gaming consoles. Once you check out, you may find that you get an order confirmation and then never receive anything at all.
2. Safeguard Your Passwords
Take the time to consider your account security before the holidays to help minimize the possibility that your accounts will be compromised. Use these best practices for keeping your accounts secure:
- Use a unique password for all your accounts. If that seems like too much effort, at least create unique and hard-to-guess passwords for your financial accounts. A password manager—even a free one—makes this easy to set up.
- Turn on multifactor authentication. Wherever possible (and again, with priority to financial accounts), turn on multifactor authentication (MFA). This security feature requires you to take an extra step to verify your identity before you can log in, and it could help keep your information safe if your account's password is compromised.
3. Check for Skimming Devices
If you're shopping in stores, check for card-skimming devices that may be attached to an ATM or card reader. Card skimming fraud is very prevalent and is estimated to cost financial institutions and consumers over $1 billion each year, according to the FBI.
In this type of fraud, a scammer attaches a device called a skimmer to a card reader. Skimmers can be so small that they're hard to detect, and your transaction goes through like normal. Unbeknownst to you, the device copies your card's information so it can be used or sold later.
4. Don't Shop on Public Wi-Fi
It can be tempting to cross a few items off your list while you're out and about, but public Wi-Fi networks might not be secure. A VPN might keep some of your information secure, but it's still best to avoid logging in to your accounts or making a purchase when you're using a public network.
5. Ignore Get-Rich-From-Home Job Ads
You may see ads about ways to "make $1,500 a week working from home." Seems fairly easy, and the extra money could certainly help during the holidays—except, you may be inadvertently participating in a criminal enterprise.
You could be asked to act as a money mule or reshipping mule by moving money from one account to another or accepting an item that's shipped to you and then reshipping it somewhere else. In either case, you may be caught in the middle of a fraud scheme. Even if you aren't knowingly committing a crime, you could wind up facing criminal charges.
6. Verify Requests for Donations
Scammers may take advantage of people's generous nature during the holidays. They'll often send emails or make phone calls posing as representatives for charitable causes and use spoofing technology to make it look like the email or call is coming from a real charity. Instead of being used to help people, however, the money will go straight to the fraudster's pocket.
Don't let scammers ruin your giving spirit, but check out an organization's website to find a legitimate phone number or online donation option when you're ready to make a donation. If you're unsure about a charitable organization, you can also look it up on sites like Charity Navigator and CharityWatch.
Stay Safe This Season and Beyond
There's a heightened risk of falling victim to identity theft and fraud during the holiday season, especially as you work your way down your shopping list amid the frenzy of the season. The precautions above can help you finish your shopping and enjoy the holidays while protecting yourself from identity theft or fraud.
If you're worried about someone using your personal information without your consent, an identity protection service like Experian IdentityWorksSM could offer a helping hand. There are several plans to choose from, and each includes U.S.-based fraud resolution specialists, dark web surveillance and identity theft insurance.