How not to be a victim of holiday fraud

Avoid-holiday-fraud-Santa-hatWhether many of us simply aren’t worried about being ripped off, or we just let our guard down at holiday time, huge numbers of us unwittingly set ourselves up for being fraud victims.

A just-released  survey of adults over 18 showed that despite the fact that we read about cyber fraud almost every day, and we certainly don’t want all our money withdrawn from our bank accounts, a surprising number of us don’t practice safe shopping.

Here are some of shoppers’ key vulnerabilities, especially at holiday time.

Internet shopping via Wi-Fi

Shopping or accessing your bank account or other financial accounts while using a public Wi-Fi connection is a recipe for disaster. Most wireless networks in coffee shops, big-box stores, and other public settings simply are not secure. If you use an unsecured Wi-Fi connection to shop or check bank balances, almost anyone can hack into your phone and intercept store account numbers, logins and passwords, credit card numbers, bank account numbers, etc.

Moreover, despite what many consumers believe, seeing the letters “https” on a site no longer ensures that the site is safe to use.

The fact is, it’s shockingly easy to be ripped off simply by having your phone connected to a Wi-Fi network. Many security experts now suggest that even if you’re not using the Internet at the time, you should turn off your W-Fi connection in public.

Credit cards vs. debit cards

Here’s fraud prevention advice that’s unfamiliar to many consumers. According to the newly released AARP consumer survey, nearly two-thirds (64%) of holiday shoppers in the U.S. said they will buy some or all of their holiday gifts using a debit card.

If at all possible, don’t do it.

The reason: If your credit card is lost or stolen, your liability is a maximum of $50. Debit card loss or theft can cost you much more.

For example if you report a debit card missing before any withdrawals are made from your bank account, you will owe nothing. However, if you report the card missing between two and 60 days after it disappears, you may be liable for up to $500. Eventually, you can be liable for the entire loss–even if thieves clean out your entire bank account.

Never buy gift cards from store displays

The safest way to buy a gift card for a friend or family member is through the store or merchant’s Website. If you don’t have time to purchase it online and must pick up a gift card in a retail store, deal only with reputable and familiar merchants–not on e-Bay or other auction sites. Always check the card carefully for signs it may have been tampered with–such as a messy scratch-off PIN area.

Fraudsters use a magnetic-strip scanner, or actually copy the gift card number, then look at the PIN. Once they’ve copied the numbers down, they simply cover up the PIN with a new sticker. Then they place the gift card back on the rack.

It’s easy to do and costs the thief almost nothing, as you can see in this ad for new scratch-off stickers that recently was posted on e-Bay.

Scratch-off-stickers-holiday-fraud
The way most gift card fraud works is that fraudsters keep checking to see if cards have been activated, as well as for the balances on cards they’ve tampered with. As soon as they see a card has been used, they go shopping online. Or they redeem the balance on the card for reward points to use to buy merchandise–which is harder to track than shopping with the card and having items delivered to a residence. Or they go to sites on which people can exchange gift cards for a discounted amount of cash.

The best way to safely buy a gift card in person is to buy it from a merchant who stores gift cards in a locked case or behind the register. In addition, ask the cashier to scan the card to check the balance before you buy it.

Most important–keep your receipt. If you get the card home and find it drained of funds, you may be able to recoup your losses by going back to the merchant that sold the card or the store where the gift card is redeemable. (Click here to learn more about the burgeoning crime of gift card fraud.)

Packages delivered to your home

It’s always risky to have packages delivered to your home if you’re not there to sign for them. At this time of year, in particular, thieves scour neighborhoods until they find UPS trucks making package deliveries. As soon as the truck leaves, a thief can casually head to the front porch and walk off with the packages.

Instead, have packages delivered to your place of work. Or at very least, if you’re not going to be home, ask a trusted neighbor to sign for the packages, and be sure to leave specific instructions for the delivery person.

Be careful when retrieving e-greeting cards

If you get an e-mail that supposedly is from Hallmark or American Greetings, don’t click on the link provided to retrieve the card. You could be inviting malware into your computer.

[General e-mail safety note: Don't click on any links in any e-mail unless you're positive it's from the person or organization claiming to send it. Always look carefully at the return e-mail address. If it's not exactly the same as your friend's e-mail address, or a retail store whose name is written exactly as it is on their own Website, odds are, it's a scam.]

The only safe way to pick up a legitimate e-card sent to you via Hallmark is to copy (don’t click on) the confirmation number. Then go to the actual Hallmark site and paste the confirmation number in the space provided.

The American Greetings e-card pick up link is at the bottom left of the home page  Paste your confirmation number in the space provided on the pop-up that appears.

See the best ways to avoid fraud when you donate to charities.

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