Consumers at Risk of Holiday Scams

Lack of knowledge, failure to take precautions leaves many vulnerable
A woman prepping holiday gifts

The holiday season may not be so jolly for some consumers, as a new study shows that seasonal scams pose a significant threat this year.

Recognizing that scammers often target consumers during the holiday season, AARP, the lobbying organization for those age 50 and over, surveyed 2,842 adults (ages 18 and older) to see how aware they are of the different threats and determine the odds that consumers will find themselves the victims of unscrupulous schemes. Researchers found that many consumers have little knowledge about common scams and in some cases, may leave themselves even more vulnerable.

One of the biggest findings to emerge from the survey was that some consumers have a lot to learn about the different techniques scammers use. As part of the survey, respondents were asked five questions about scams that are common to the holiday season. While the average ‘quiz’ score was 3.45 correct out of 5, 1 in 6 respondents failed the quiz by answering two or fewer of the five questions correctly.

A look at some popular scams

One way scammers target consumers is through gift card-related scams. A majority of respondents — more than 71% — said they planned to purchase gift cards this holiday season, and of those planning to buy gift cards, 69% said they would buy them off the rack at a grocery store, pharmacy or big box store. Yet, 24% of survey respondents did not know that gift cards purchased from a gift card rack in a store could be targeted by hackers. On top of that, 1 in 5 of respondents have either given or received a gift card that had no money on it.

Scammers also sometimes appeal to the heartstrings of consumers by getting them to give money to fake charities. The survey found that only 52% of adults either ‘always’ or ‘sometimes’ do research on an organization before donating money. Taking the time to do research could reveal that a charity is not doing legitimate work. In fact, the survey showed that of those respondents who did research a charity before giving, 54% did not move forward with the donation because of what they learned on websites that rate charities.

The survey also touched on the threat posed by thieves who steal online purchases after they are delivered at consumers’ homes. Among survey respondents, 49% expect to mail gift packages to family and friends and 75% expect to receive packages at their home this holiday season. Yet, 50% of those who plan to send gifts to family and friends never request a signature from the recipient to ensure receipt. Also, 92% of respondents said packages are left outside their homes without requiring their signature either all or some of the time. Such practices could make those packages vulnerable to theft.

With so much to do during the busy holiday season, it can be easy to overlook certain safety precautions. However, taking the time to research a charity or check a retailer’s gift card policy, for example, could save you money in the long run. If you do buy gifts online and have them delivered, make sure you know what to do if porch pirates strike. Also, consider using a credit card for purchases so you can dispute fraudulent charges without worrying about thieves getting access to your checking account.

Tamara E. Holmes

Tamara E. Holmes is a Washington, DC-based writer who covers personal finance, entrepreneurship and careers.

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