5 credit card scams to watch out for this holiday season

Avoiding scam artists has to be near the bottom of your list of things to do during the holidays. Nonetheless, the holidays can be a prime time for scammers looking to capitalize on the busy season. When you’re hosting out-of-town guests, it’s easy to overlook one fraudulent transaction in a bank statement full of gift purchases, and there may not be time to dispute suspicious charges.

According to Javelin Strategy & Research, an identity fraud scam is a tactic used by a criminal to steal someone’s personal information for the purpose of illegal financial gain. According to Javelin’s 2023 Identity Fraud Study, consumers will lose $43 billion to these scams in 2022.

If there is some good news, it is that there were 17% fewer reported victims of identity fraud in 2022 than in 2021, with a 17% decrease in the amount of money lost to scams. The bad news is that scammers’ methods have become more sophisticated, and they now have a new weapon in their arsenal: artificial intelligence. Scam emails, text messages, and audio recordings that mimic the speech of loved ones can be generated using AI programs.

Being aware of the latest tools and tactics used by scammers is a powerful defense against identity theft. Here are five credit card scams to be aware of during the holiday season.

1. The Amazon scam

Many people will turn to Amazon for their holiday shopping. However, as our inboxes fill up with order confirmation emails and delivery updates, be wary of messages claiming to be from Amazon. Scammers may contact you via email, text message, or phone in order to obtain your credit card information. They may tell you that you need to update your payment method to keep your Prime membership from expiring, or that your Amazon account will be deleted unless you verify it with payment information.

How to combat it: If you are unsure whether an email or text message is genuine, do not click on any links in it. Instead, sign in to your Amazon account and navigate to the Message Center, which contains a record of all Amazon communications. Don’t give out your credit card information if you’re contacted by phone. Amazon will not request payment information over the phone. Also, never enter your Amazon payment information on any website other than Amazon.com.

2. The romance scam

Because the holiday season can heighten feelings of loneliness, romance scams can be especially effective. Scammers will establish a relationship with their victims after creating a fake profile on a dating website or social media platform before requesting money. Medical or legal bills, as well as funding for an investment opportunity, are common reasons for needing money. According to the Identity Theft Resource Center’s 2023 Consumer Impact Report, a nonprofit that assists victims of identity theft, romance scams consistently report six-figure losses, highlighting the seriousness of this scam.

How to combat it: If someone you met on a dating website or social media platform asks you for money, look up their name and do a Google reverse image search of their profile picture to see if they’re impersonating someone else. Investigate any detail that appears suspicious; you do not have to accept what someone says as true.

Give no payment information or personal information that could be used to open credit cards to anyone you haven’t met in person.

3. The gift card swindle

Gift cards make excellent stocking stuffers or last-minute presents, but they are also a popular target for scammers. The scammer will contact victims via phone, email, or text message and ask them to purchase gift cards, usually as payment for an outstanding bill or as prepayment for a service they are offering to provide.

A person posing as a computer technician, for example, may offer to remove a virus from your laptop in exchange for a $100 Amazon gift card. After purchasing the gift card, the scammer requests the gift card’s number and PIN. The scammer will save time and effort by not having to physically obtain the card.

How to combat it: Gift cards are not accepted as payment by any legitimate business or government agency. Keep receipts and photos of card numbers and PINs whenever you purchase gift cards in case you need to file a report with the gift card company or the Federal Trade Commission.

4. The charity scam

When asked to make a donation, learn about the charity and the cause it supports. If you’re unsure whether you’re communicating with a legitimate charity, pause to conduct additional research. Look up the charity’s name on a nonprofit vetting website, such as Charity Watch or Charity Navigator.

How to combat it: Ask for the name of the charity, then look it up on a charity-vetting website, such as Charity Watch or Charity Navigator. Of course, the scammer could pretend to be a representative of a legitimate charity. If you are unsure, you do not have to donate right away. When you’re ready to donate, use a credit card if possible: The major credit card companies have zero-liability policies that protect you financially from fraud. Payments made in cash, cryptocurrency, or wire transfer are more difficult to recover; if you’re asked to donate in these ways, it could indicate that you’re dealing with a scammer.

5. The lottery deception

A cash windfall during the holidays sounds too good to be true, and it probably is. In this scam, the criminal claims you’ve won a physical or monetary prize that is yours as long as you pay or provide payment information to cover a processing fee.

How to combat it: Request the name of the company claiming you won the sweepstakes and contact them to confirm your status. Take care, however, to look up the company’s information yourself rather than calling a phone number given to you by the person who says you’ve won.

How to Recover from a Scam and Minimize Damage

Even the most cautious of us can fall victim to a scam. However, there are steps you can take to mitigate the damage and begin the recovery process.

Freeze your credit file with the three major credit reporting agencies: TransUnion, Experian, and Equifax. When a freeze is in place, scammers cannot open a new credit line in your name. You can also choose to receive alerts when there is suspicious account activity on your credit card or when any transaction occurs.

Mitigation: If you suspect that your credit card has been compromised, put a lock on it so that it cannot be used until you unlock it. Then, call your card company and express your concerns to the fraud department, if one exists.

Learn the six steps you can take to reclaim your money and identity after they’ve been stolen. Contact the Identity Theft Resource Center for free personalized assistance.