Avoiding Holiday Scams

The hustle and bustle of the holiday season is upon us. Unfortunately, con artists are also out in full force. The Federal Trade Commission (FTC) reports that consumers lost nearly $8.8 billion to scams in 2022. This represented a 30% increase over 2021 (ftc.gov). Some reports have the number as high as $10 billion. Scams work both ways –buyers and sellers can each be victims. Helping clients identify and avoid scams is another value-added service of the professional insurance agent.
Statistics are alarming, but the true impact of scams is impossible to determine. It is estimated that only 10% of victims report the event. Aura.com estimates that nearly 75% of Americans experienced some type of swindle in 2022. The FTC reports that investment scams, such as Ponzi schemes, more than doubled from $1.8 billion in 2021 to $3.8 billion. Imposter scams – people pretending to be legitimate businesses or government entities – also increased from $453 million to $660 million in the same period. $1.2 billion was lost to social media schemes. Romance scams victimized a reported 72,806 people, to the tune of over $1 billion (comparitech.com).
According to usa.gov, some of the most common schemes to look for in 2023 and beyond include robocalls and fraudulent texts, romance, spoofing, and charity scams. Robocalls use auto-dialing software to deliver prerecorded messages – sometimes to millions of people per day. Often these callers spoof the phone number they use perhaps pretending to be from a legitimate business and asking for personal information or payment of an alleged overdue amount.
Package delivery notification ploys start with an email, call, or text saying there is trouble with your address and asking for personal information to complete the delivery. They may purport the delivery to be a gift from a friend or relative. A red flag might be a request for payment of postage due or a delivery fee, or a link to a misspelled website.
Imposter scams can be done via phone calls or fake websites. In either case, they pretend to be a legitimate business. Unfortunately, offers that seem to be too good to be true usually are. Websites that tout deep discounts often contain malware and viruses that can steal personal information or scramble the workings of a computer or other electronic device.
Charity Frauds – The holiday season brings out generosity in many people, especially those looking to make donations for tax purposes before year end. Unscrupulous individuals pose as legitimate charities to defraud people of their money. Before making a donation, be sure to check the legitimacy of the charity by contacting the organization directly or doing research through consumer protection agencies. Charitynavigator.org provides comprehensive ratings of charities, including where the money goes and the overall health of the charity. Crowdfunding requests such as GoFundMe tug on the heartstrings, but there have been many cases of the money not going to the cause for which the donor intended it.
Anyone who falls victim to such a scheme should report it to the police and their insurance carrier. Many home and business policies include or offer identity theft protection. Coverage is also available through standalone programs.
To avoid being a victim, pay for purchases with credit cards, keep receipts, and check card and bank statements. Research unfamiliar websites and “deals” before buying. Do not open email or links from people you don’t know. Use strong passwords and keep virus protection software up to date. Government agencies do not solicit payment or personal information via email or phone calls, and they never ask for payment in gift cards. Be wary of “surveys” that offer gifts for completion. Sellers should use secure payment methods.
Falling victim to a scam, especially during the holidays, can be expensive, emotionally taxing, and time-consuming.Helping clients recognize scams and avoid becoming victims is another sign of the true insurance professional.

This article is for educational and discussion purposes only and it is not insurance or legal advice and should not be relied upon when making insurance or legal decisions. Nothing herein shall be construed to constitute a legal or underwriting opinion. Nothing herein shall be construed as offering any political, social, or public policy opinion by the author or MSO. Neither the author nor MSO are responsible for errors in, or the accuracy or currentness of, the article.