The festive season, with its spirit of giving and joy, unfortunately, also brings with it a rise in fraudulent activities. Scammers take advantage of the increased spending and often hectic nature of the holidays to trick unsuspecting victims. From online shopping frauds to charity scams, the techniques used are diverse and often sophisticated. Being aware of these scams and knowing how to avoid them is crucial for a safe and happy holiday season.
1. Online Shopping Scams: With more people opting for the convenience of online shopping, especially during holidays, cybercriminals have upped their game. Fake websites mimicking legitimate retailers are not uncommon. They lure shoppers with unbelievable discounts and deals on popular items, only to steal credit card information or fail to deliver the products. To avoid falling victim, always shop from reputable websites, check for secure payment gateways (look for URLs starting with ‘https’), and be wary of deals that seem too good to be true.
2. Delivery Scams: Another common trick is the delivery scam, where you might receive a text or email claiming there’s a package for you, but additional details or payment is required. These messages often contain phishing links designed to steal personal information. Remember, legitimate delivery services will not ask for personal details or payment via an unsolicited message.
3. Gift Card Frauds: Gift cards are a popular choice during the festive season, but they are also a common tool for scammers. Be cautious if you receive an email or call asking for payment via gift cards, as legitimate businesses and government agencies will never demand this. Additionally, when purchasing gift cards, check that they haven't been tampered with and that the codes are not visible.
4. Charity Scams: The season of giving sees a spike in charitable activities, but it also attracts scammers who set up fake charities or fundraising campaigns. Before donating, verify the legitimacy of the charity through official registries and be cautious of unsolicited donation requests, especially via email or over the phone.
5. Loan fee scams: It typically begins with an offer of a loan that seems like the perfect solution to your holiday financial strain. The catch is an upfront fee, supposedly to cover processing, insurance, or even the first instalment. Once this fee is paid, the promised loan never materialises, and the scammer disappears. These scams often target those who may have difficulty obtaining loans through traditional channels, making the false promise of guaranteed or unsecured loans even more enticing.
The FCA found almost half of UK adults (47%) feel pressured to spend above their means during Christmas to provide for loved ones, rising to almost two-thirds (64%) for those with children under 18. Two in five (40%) UK adults, and over half of those (52%) with children under 18, are also concerned about being able to afford Christmas spending this year. According to Debt Free Advice, the debt advice coalition, new debt assessments between December 2022 to March 2023 were 83% higher compared to April to July 2023.
With financial pressure building and more looking to borrow, the FCA is concerned stretched households could be vulnerable to loan fee fraud. Loan fee fraud - where a consumer pays a fee for a loan they never receive – typically results, on average, in a £255 loss.
To combat the rising threat of loan fee fraud, the FCA is taking measures to raise awareness. The FCA is urging consumers looking for a loan to do the 3-step check to protect themselves from scams: If you are cold called or emailed, it could be a scam. Or if you’re asked to pay an upfront fee, it could be a scam. Or if you’re asked to pay quickly or unusually, it could be a scam.