Frauds and Scams
Every year, thousands of people become victims of holiday scams. Scammers can rob you of hard-earned money, personal information, and, at the very least, a festive mood. The two most prevalent of these holiday scams are non-delivery and non-payment crimes. In a non-delivery scam, a buyer pays for goods or services they find online, but those items are never received. Conversely, a non-payment scam involves goods or services being shipped, but the seller is never paid. Similar scams to beware of this time of year are auction fraud, where a product is misrepresented on an auction site, and gift card fraud, when a seller asks you to pay with a pre-paid card. When shopping online during the holiday season—or any time of year—always be wary of deals that seem too good to be true. Do your part to avoid becoming a scammer’s next victim.
Tips to Avoid Holiday Scams
Whether you’re the buyer or the seller, there are a number of ways you can protect yourself—and your wallet.
Practice good cybersecurity hygiene.
- Don’t click any suspicious links or attachments in emails, on websites, or on social media. Phishing scams and similar crimes get you to click on links and give up personal information like your name, password, and bank account number. In some cases, you may unknowingly download malware to your device.
- Be especially wary if a company asks you to update your password or account information. Look up the company’s phone number on your own and call the company.
Know who you’re buying from or selling to.
- Check each website’s URL to make sure it’s legitimate and secure. A site you’re buying from should have https in the web address. If it doesn’t, don’t enter your information on that site.
- If you’re purchasing from a company for the first time, do your research and check reviews.
- Verify the legitimacy of a buyer or seller before moving forward with a purchase. If you’re using an online marketplace or auction website, check their feedback rating. Be wary of buyers and sellers with mostly unfavorable feedback ratings or no ratings at all.
- Avoid sellers who act as authorized dealers or factory representatives of popular items in countries where there would be no such deals.
- Be wary of sellers who post an auction or advertisement as if they reside in the U.S., then respond to questions by stating they are out of the country on business, family emergency, or similar reasons.
- Avoid buyers who request their purchase be shipped using a certain method to avoid customs or taxes inside another country.
Be careful how you pay.
- Never wire money directly to a seller.
- Avoid paying for items with pre-paid gift cards. In these scams, a seller will ask you to send them a gift card number and PIN. Instead of using that gift card for your payment, the scammer will steal the funds, and you’ll never receive your item.
- Use a credit card when shopping online and check your statement regularly. If you see a suspicious transaction, contact your credit card company to dispute the charge.
Monitor the shipping process.
- Always get tracking numbers for items you buy online, so you can make sure they have been shipped and can follow the delivery process.
- Be suspect of any credit card purchases where the address of the cardholder does not match the shipping address when you are selling. Always receive the cardholder’s authorization before shipping any products.
And remember: If it seems too good to be true, it probably is.
The Amazon Impersonator Scam
How the scam works: A scammer pretending to be from Amazon contacts you to confirm a recent purchase that you didn’t make or to tell you that your account has been hacked. The scammer then offers to "refund" you for an authorized purchase but "accidentally transfers" more than the promised amount. In reality, they have transferred money from one of your bank accounts to the other (like savings to checking) or manipulated your screen to make it look like you were refunded. Any money you send back to "Amazon" is your money (not an overpayment) and the money now belongs to the scammer. Another version of this scam is that you’re told that hackers have gotten access to your account, and the only way to "protect it" is to buy gift cards and share the gift card number and PIN on the back of the card. Once you have shared this information, the money now belongs to the scammer.
What you should do: Never call back an unknown number - Use the contact information found on Amazon’s website and not a number listed in an unexpected mail or text. Don’t pay for anything with a gift card - If anyone asks you to pay with a gift card or buy gift cards for anything other than a gift, it’s a scam. Don’t give remote access to someone who contacts you unexpectedly – This gives the scammer easy access to your personal and financial information, like your bank accounts.
The Grandchild Scam
How the scam works: A person will call your home and when you answer the phone will address you as grandma or grandpa. The grandparent often will respond by saying a grandchild’s name such as “Is that you Jenny?” The caller will then agree to being that grandchild and say that he or she is in some sort of trouble such as stranded in a foreign country or in jail and in need of having money wired to them. In addition, the caller will often request the grandparent to keep this situation a secret from his or her parents.
What you should do: If you get this type of a phone call, ask the caller to identify themselves. Request the caller give you a phone number where you can call the back. Before going any further you should try to contact your grandchild or their parents to see whether someone is really in need of help. Never send money or give any information until you have confirmed there is a real problem with your grandchild.
The Lottery Scam
How the scam works: You will receive a letter or an email stating that you have won a lottery most likely in another country. In order to claim your winnings, the letter will state that you need to pay the taxes on the winnings. Often times the letter will include a check for a few thousand dollars with instructions for you to deposit the check then wire, Money Gram, or Western Union the money back to pay these taxes. Unfortunately what happens is the money is wired back out per the instructions and then the check is returned against your bank account as it is a counterfeit item.
What you should do: The first step is to recall whether you’ve entered a lottery in another country. If not, do not call the number in the letter or send money as directed.
The Bank Account Scam
How the scam works: A person will call you posing as a bank representative. The caller will indicate there is a problem of some sort with your account. To ‘fix’ the problem the caller will ask for you to provide your account number and possibly other personal information.
What you should do: If you get this type of call you should ask the caller’s name, phone number and the information they are requesting, and then end the call. Next you should contact your bank using a published phone number to verify whether there is an issue with your account. Citizens First Bank will never call you asking for your account number or your personal information.
eBay or Craigslist Scam
How the scam works: You have listed an article for sale on E-Bay or Craig’s List. Someone will contact you and offer to buy the article from you but will state the shipment of said item will be handled by a third party. The buyer will tell you they are sending you a check in the mail for an amount much higher than the cost of the article they are purchasing and ask that you deposit the check and then wire, Money Gram or Western Union the difference to their agent that will handle the shipping. As with the lottery scam, the check they send you will be counterfeit and will be charged back against your account if you deposit it leaving you with a large loss if you have already wired the money out.
What you should do: Never agree to accept more than the asking price for an item you are selling on the internet. Only accept a secure method of payment from buyers. If you accept checks (even cashier’s checks) deposit the items and wait for the funds to clear. Do not ship the article until you know you have clear funds.
How the scam works: You join an online dating site and you’re contacted online by someone who appears interested in you. He or she may have a profile you can read or a picture that is e-mailed to you. For some time, you may chat back and forth, forming a connection. You may even be sent flowers or other gifts. But eventually there will be some type of crisis and, your new-found “friend” will ask you for money. If you do send money, be assured the requests won’t stop there. There will be more hardships that only you can alleviate.
Recognizing an Online Dating Scam Artist
Your online “date” may only be interested in your money if he or she:
- Presses you to leave the dating website you met through and to communicate using personal e-mail or instant messaging;
- Professes instant feelings of love;
- Sends you a photograph of himself or herself that looks like something from a glamour magazine;
- Claims to be from the U.S. and is traveling or working overseas;
- Makes plans to visit you but is then unable to do so because of a tragic event; or
- Asks for money for a variety of reasons (travel, medical emergencies, hotel bills, hospitals bills for child or other relative, visas or other official documents, losses from a financial setback or crime victimization).
What you should do: Stick to online dating websites with nationally known reputations and keep these tips in mind when visiting these sites.
How the scam works: The scammers may say they’re with a government agency, a consumer advocacy group, a law firm, a charity, or some other organization. Some even say they’re with the fake company that took your money, and they’re offering refunds to dissatisfied customers. They may say they’re holding money for you, offer to file complaint paperwork with government agencies on your behalf, or claim they can get your name at the top of a list for reimbursement. Whatever they say, it’s a lie, designed to gain your trust — and your money. You’re told you need to pay. The scammers promise to recover your money or merchandise, but they need you to pay them or give them financial information first. They may call the upfront money a “retainer fee,” “processing fee,” “administrative charge,” “tax,” “shipment and handling charge,” or even a “donation” to a charity they name. Or, they may say they need your checking, debit, or other financial account number so they can deposit a refund directly into your account. If you give them the requested fee or account information, your money will disappear.
What you should do: Never pay upfront for a refund or help with a refund. That means, never give your bank account, credit card, or other payment information to get a refund. Anyone who asks for your financial information or for upfront fees is a scammer. Know that only scammers will tell you to pay by gift card, cryptocurrency, or wire transfer through companies like Western Union or MoneyGram. Anyone who asks you to pay in any of these ways is a scammer.
Be suspicious if you get a supposed refund check for more money than you lost. Some scammers will say there was an error and tell you to cash the check, keep the amount you’re due, and return the balance. It can take weeks for a bank to discover that a check it cleared was a fake. In the meantime, if you use the money, even to return some to the scammer, the bank will want you to repay that money.
Pay in Advance for Work/Services
How the scam works: Someone comes to your home unsolicited and offers to perform some type of work for you, possibly yard work, landscaping, painting or other home maintenance but they tell you they need all or part of their fee up front for materials etc. You agree to have them perform the work and advance them the agreed amount of money. They leave your home without performing the work and never return.
Another version of this scam is you receive an unsolicited phone call from someone claiming to be from a computer company such as Microsoft. The caller will inform you that you have a problem with your computer and will ask you for information about your computer which will allow them access to repair the issue. Of course there is always a large fee involved to perform this service. Once you have given the caller access to your computer they may have access to any personal information you have stored on your computer and may be able to install mal-ware that essentially allows them to spy on everything you do on the computer. Also, if have given the caller your debit or credit card information for the charges and are at risk for other unauthorized charges.
What you should do: Use caution doing business with contractors who contact you to perform unsolicited maintenance. NEVER give your personal information such as computer IP address, debit or credit card information to an unsolicited caller. If you do have issues with your computer the manufacturer will not contact you by phone asking for access to your PC or for money to perform repairs. ALWAYS use a reputable computer repair business to perform any repairs or upgrades.
Secret Federal Reserve Bank Account Scam
How the Scam Works: You receive an email, text, phone call or see a video on social media describing how you can pay your bills using a “Secret Account” or “Social Security Trust Account” and routing numbers at Federal Reserve Banks. All you have to do is provide your personal information, like your social security number in exchange for these account numbers. What do you really get? Your personal information stolen then sold or used to commit fraud like ‘Identity Theft’.
Remember, only banks can bank at the Federal Reserve, not people! What will happen if you try to use this ‘secret’ account? The payment will be denied by the Federal Reserve because you don’t have an account there. Your bill will go unpaid and you will be notified that you still owe the money and probably have a late fee or penalty added to the amount you owe.
What you should do: Never give your credit card, bank account or Social Security number to anyone who calls or emails and asks for this information - no matter who they are. Report any attempts to solicit this type of activity to the FTC
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Contact the Federal Trade Commission (FTC) by telephone at (877) FTC-HELP or via the FTC’s website at www.ftc.gov and/or the Federal Bureau of Investigation Internet Crime Complaint Center (to report scams that may have originated via the Internet) at their website www.ic3.gov to file complaints.
If correspondence is received via the US Postal Service, contact the US Postal Inspection Service by telephone at (888) 877-7644; by mail at US Postal Inspection Service, Office of Inspector General, Operations Support Group, 222 S. Riverside Plaza, Ste. 1250, Chicago, IL 60606-6100 or via the online complaint form at https://www.uspis.gov/report.
To find trustworthy businesses and to make wise decisions when choosing a company to perform maintenance utilize the Better Business Bureau’s (BBB) website www.bbb.org. Visit www.seniorsvscrime.com for information on how to file complaints.