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3 sneaky scams to beware during the 2017 holiday season
Bitcoin scams, IRS or tax scams, PayPal scams... and that’s not all! Here are three major types of scams to be on high alert for during the 2017 holiday season — online, by phone or by email. Nicoleta Ionescu/Shutterstock

When you’re busy wrapping up year-end projects and trying to stay on top of gift shopping, it’s tricky to fight off the stress-induced brain fog — and protect yourself against predators who want to steal your money. But alas, with travel to plan and familial obligations to fulfill, the holidays are distracting enough that scammers have it easy: and a few missteps here and there could cost you.

“There’s an actual calendar of fraud,” Alan Brill, senior managing director of cybersecurity and investigations at risk solutions firm Kroll, said in a phone interview. “A lot goes on around the holidays, and then [there’s] a little lull until it picks up again around Valentine’s Day.”

Indeed, a slew of new frauds have made headlines lately, including bitcoin scams as the cryptocurrency has gained popularity; multiple IRS or tax phone scams (one involving iTunes gift cards); and at least one new PayPal scam. Other sneaky scams — detailed further down in this piece — target holiday shoppers and people just minding their own business alike.

Why are the holidays such a busy time for crime? Hackers may be poised to rip you off because they know you’re probably feeling frenzied and a little desperate. That’s especially true if the scams are retail-related. “If you put off shopping until the last minute, you may be more frantic to find a deal and your options could be limited the longer you wait,” Sitejabber CEO Michael Lai said. “If you are looking for something specific, don’t put off shopping ... take your time, do your research and read reviews.”

In general, as one Better Business Bureau account on Twitter suggests, it is also smart to follow Federal Trade Commission guidelines and regularly delete apps or remove browser permissions for services you don’t consider essential, since the more you sign up for, the more likely a scammer can slip through.

Although plenty of scams are prevalent year-round, here are three to be especially wary of this holiday season:

1. Phone calls that appear to be from your bank or credit card

Perhaps you have been warned about fake phishing emails that look like they’re coming from your bank or credit card company, but what about a phone call that sounds authentic — and looks like it is really from a trusted financial institution?

“We’ve all seen bank or credit card commercials where they say if they find a problem with your account, they’ll call you,” Brill said. “Unfortunately, the bad guys are watching the same commercials and can easily use software to manipulate the caller ID number to read whatever they want.”

The scam goes down like this: You’re sitting at home and receive a call from “Visa fraud protection center.” The caller identifies himself as being a fraud protection agent from Visa and wants to confirm a purchase you made for $300 at Happy John’s Adult Emporium in Delray Beach, Florida. Of course you didn’t, you say, and ask the caller to remove the charge from your bill.

The agent complies and says that while you’re on the phone, why don't you sign up for a special fraud alert program free of charge? Delighted that your card will be monitored, you offer up your credit card number, expiration date, CV code and security password. You may even be asked to provide your Social Security number, just in case.

Meanwhile, you receive your credit card bill 10 days later and find $3,000 worth of charges made overseas. You’ve been taken.

What you can do: If you have any doubt about the validity of a call, hang up right away, John Ganotis, founder of CreditCardInsider.com, said in an email. “You can always call your bank or credit card issuer back to ask them if any of your accounts are legitimately under fraud investigation,” Ganotis said. You may also be able to cut down on scam calls by installing a call-blocking app on your smartphone. These apps are designed to filter out calls that look suspicious.

Setting up alerts with your bank so you get a text every time your card is swiped could be another layer of protection. “It’s a little annoying, but I set my limit very low — like under $1 — so no matter what, I know when my card is being used,” Brill said.

Once you’ve found a fraudulent charge on your card, dispute it immediately. Some card issuers let you do this directly on their website, but it doesn’t hurt to call for a faster response.

2. Gift card scams you don’t notice until it’s too late

Gift cards appear to be as popular with criminals as they are with consumers, Brill said. “It’s pretty easy for the criminal to steal 1,000 cards, get the codes and then cash them after they’ve been activated by the customer,” he explained.

The scam goes down like this: The criminal steals the gift card from the store, records the card’s number and removes the scratch-off strip from the back to obtain the card’s security code, according to Consumer Reports. The criminal then replaces the scratch-off strip, which Brill said is quite simple. “You can order 1,000 of these stickers off of eBay for $5,” he said.

The criminal returns the card to the store and waits until someone buys one and loads money onto it. “The crooks can see as soon as someone activates the card, because they’ve automated all this with software that periodically checks the card balance via the internet,” David Farquhar, unit chief in the FBI’s Criminal Investigative Division, told Consumer Reports. Then they use the card to purchase` whatever they want.

What you can do: Before you purchase any gift card, check out ValuePenguin’s list of the most-to-least secure gift cards before making your selection. Also, Consumer Reports recommends purchasing the gift card from a reputable online retailer rather than racked in-store cards. “If you do purchase a card from a rack in a store, make sure it has not been bent or appears to be tampered with,” Brill said. “And if you receive a gift card, don't let it sit around because it gives the hacker more time to use it.”

If you get scammed this way, immediately contact the retailer and report the fraud to get your money back.

3. Major retail websites... that aren’t what they seem

The excitement of trying to find that big discount may create the perfect storm for hackers looking to steal cash by creating fake websites. “The criminal may try to recreate a popular retailer by designing a URL that looks like the retailer’s address, but could be off a letter or include a dash,” Brill said. For instance, johnspizza.com could be a legitimate site, but the criminal would create a URL like johnspizzas.com.

The scam goes down like this: You really want to surprise your spouse with a new bike but can’t seem to find the right deal. You can’t find legit coupons and the bike never seems to go on sale online, either.

And then boom! Your deft Googling leads you to a site from a retailer that sells the bike you want at a huge discount, with free shipping and no tax. The site claims it can sell you the bike at a low price because it’s only selling bikes in colors no one typically orders. You decide to sacrifice color for the giant discount and place your order. You lock in the deal with your credit card and wait for a bike that, quite possibly, will never arrive.

What you can do: Make sure the site’s URL begins with “https” (rather than the less-secure http), never download any files from suspicious sites and scrutinize links on social media before clicking on them, as Forbes recommends.

When it comes to ordering from new or unreviewed merchants, consider opening a virtual credit card, which provides an added layer of protection when shopping online. “Virtual credit cards are essentially an online version of your chip-enabled credit card,” Lisa Gerstner, contributing editor at Kiplinger, told Credit Karma. “Each time you use your chip card or a virtual credit card, the payment is made with unique information which is not useful to criminals.”

If you do get scammed, contact your credit card issuer immediately to dispute the charge. For more information on other ways crooks are trying to swindle you, read Mic’s stories on some of 2017’s worst scams here and here.

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