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Serving members worldwide since 1935.
Lynn EnglishWritten by:
Lynn M. English
Lafayette Federal Credit Union
Senior Vice President, Risk Management

'Tis the season for gatherings, giving, and of course, holiday shopping. According to Adobe’s online shopping forecastOpens in New Window, Americans will spend $207 billion online from November 1st to December 31st. Unfortunately, with the convenience of shopping online comes an avenue for scammers to thrive. The Better Business Bureau’s (BBB) Scam Tracker Risk ReportOpens in New Window, states that 38 percent of scams reported last year were from online shopping scams.

Purchasing goods online has many benefits, including being able to compare prices, take advantage of special discounts, preview return policies, and locate any number of items from stores/retailers worldwide. All with the simple click or two of a mouse, you can have these items delivered right to your doorstep.

To help you stay safe this holiday season, we’ve identified several online shopping scams that are prevalent this year, tips to help you avoid becoming a victim, and red flags to pay attention to before you hit the order button.

The Latest Holiday Scams

Cybercriminals know that the holiday shopping season is a prime time for online spending. And with the stress of the holiday rush, it’s understandable why consumers may quickly pull the trigger on an online deal.

The Package Tracking Scam

The primary tactic with this type of scam involves you receiving a text message supposedly from the US Postal Service, FedEx, UPS, or any other delivery service. You are asked to click a link that is seemingly related to your purchase; for example, track your package, confirm your order, or schedule a delivery date/time.

If you click the link in the message, you are usually taken to a fraudulent website that asks you to enter personal information that will likely be used for identity theft. The website might also have malicious malware that could infect your computer/device and put your private information at risk, including your login information to any site you’ve logged into on that device. The best way to avoid this scam is to contact the shipping service directly, or go to their website to track packages.

The Fake Retailer or Imposter Website Scams

This year especially, shoppers have encountered supply shortages for high-demand goods or items. The type of scam involves the use phony websites to advertise high-end or sought-after items such as gaming consoles. Alternatively, imposter websites might look identical to your favorite at first glance but there is often tell-tale signs that it is not the right one; for example, the URL is a few letters or characters off, and/or there are grammatical errors and typos.

After you’re made a purchase, these scammers can steal your personal information and use it to commit fraud. They may even send you a tracking number to make you believe you will receive your order. Unfortunately, you’ll likely never receive the item that you thought you paid for. If you do receive anything, it may only be a cheap or counterfeit product instead of the real thing.

The best way to avoid falling victim to this type of scam is to make sure you are on a legitimate website. Type the website directly in the URL bar, instead of clicking on a link to take you to it.

Fake Charitable Donation Scams

The holiday season is equally for giving, a time when people look for ways they can make a difference for those less fortunate and give back to their communities. In 2020, Americans made $471 billion in charitable contributions. It’s estimated that in a given year, approximately one-third of all donations are made in the month of December alone.

As the non-profit sector ramps up its marketing efforts to attract those end-of-year donations, so do scammers hoping to cash in on the holiday season generosity.

Learn moreOpens in New Window about charitable donation scams and how to best protect yourself.

Five Tips to Avoid Online Shopping Scams

When it comes to online shopping scams, prevention is the best measure you can take to protect yourself against fraud. The following tips may help you spot a scam before it’s too late.

Do Your Research

Whether you’re shopping online at a brick and mortar store, always do your due diligence. Find out as much as you can about the legitimacy of the retailer, person, or organization that you are purchasing from before you buy.

First, the Better Business Bureau recommends looking for the "s'' in the HTTPS part of the URL for retail websites, which is a good indicator that the site is secure. Also, look for the "lock” icon on the shopping cart page. This will signal that the webpage is encrypted. When your payment information is transferred online, it will be done over a secure connection.

Additionally, you should always read reviews for both retailers and products. Be sure that the reviews come from a variety of individuals and include detailed information about the product or services. Keep in mind that some reviews are gathered as part of a promotion, so they may be biased or exaggerated. However, if any reviews indicate that products were faulty or never arrived, it may be a sign that it’s a scam.

Use a Credit Card for Online Purchases

As explained in our Credit Cards 101 articleOpens in New Window, using a credit card to make purchases is one of the safest methods available. Most credit card issuers offer zero-liability protection, so you will never be liable for any unauthorized use of your card. Furthermore, you have extra protection with federal law, which limits the amount of any fraudulent activity that you are responsible to $50. Alternatively, if you use a debit card, there are usually not as much safety measures in place. Should fraudulent activity occur on the card, your financial institution will attempt to recover any money lost to fraud, but there is no protection in place to fully cover you.

Update Your Antivirus Software

Make it a point to install or update firewall, antivirus, and anti-spyware software from a reputable software company. This software detects, blocks, and removes viruses or malicious applications from your computer before they cause damage or require professional repair. Don’t forget your mobile devices, antivirus is available for those as well.

Stay Alert

When you shop online, read reviews and look for legitimate sellers before making a purchase. When you get to a retailer’s homepage, take a good look at the site. If it looks disorganized, confusing, or worrisome, trusting your instincts is a safe bet.

The same goes for email. Phishing scams, where scammers often try to convince you to click on a link that redirects you to a phony website, can look convincing if the email or text looks like it’s from a well-known source. If you’re suspicious, use a reliable search engine to investigate further. Input the email address, or even phrases from the email itself, alongside the word "scam” in the search bar. If it’s a known scam, it may have already been reported by other consumers online.

Protect Your Personal Information

Often, companies use your information as a way to market appropriate products and services to you, but know that your information may be sold or shared, and in less common instances, it can also be "leaked” in security breaches.

Protect yourself by reading a retailer’s privacy policy. If there are any terms you don’t agree with, such as how the company will share your information, you can opt out. The company is obligated to provide a way for you to remove yourself from the sharing of information.

Your login information is a main line of defense against cybercriminals. Always use complex, strong passwords, and change them on a regular basis. Whenever possible, use two-step authentication as a way to safely log in online. When using this security practice, you are usually sent a text or an email asking you to confirm that it is actually you logging in from your specific computer and location.

Online Shopping Red Flags

In addition to the tips above, the following red flags can help you recognize a scam before you become a victim.

Payments Apps Only

If possible, avoid shopping with retailers or sellers that only accept cash-like payments through services like Venmo, Zelle, PayPal, or Square. Because most payment apps directly link to your bank account, you may have difficulty getting your money back if you accidentally pay a scammer. Finding the scammer or the item you paid for can be nearly impossible once they disappear from the app. If you must use this type of payment method, be sure it’s going to a reliable source, and have the payment link to your credit card (see safety measures listed above).

Too Good to Be True

If the store’s deal or discount seems too good to be true, it can very well be just that. For instance, if there’s a hard-to-find item being advertised massively discounted, it may be linked to a scam. Also, be careful to read the fine print for each retailer you shop with, as your purchases could later cost you a monthly or annual subscription that you were never made aware of.

High-Pressure Sales

Sellers that put pressure on you to buy their goods or services may be scammers. Scammers may use emotional pleas to get you to buy from them. If you’re feeling pressured to make a purchase quickly, it may be best to decline, even if they offer you a "special” limited-time offer. You should be confident that you’re working with a legitimate seller, even if it could cost you that great offer.

What To Do If You Think You've Been a Victim

We know that detecting online shopping scams isn’t easy, and it certainly isn’t fun. We also know that when you make the decision to spend your money online, nothing is foolproof. But, your financial safety is worth the extra time and precaution.

The best practice to not being a victim is to be educated on scams. Unfortunately even the most educated person can become a victim of a scam. If you believe yourself to be one, there are steps you can take to try and prevent any further damage. The faster you act, the better chance you have of protecting yourself.

If the scam has taken place on a legitimate online site, report the activity to the platform as soon as possible. They should take action to shut down the scammer’s account and prevent them from defrauding anyone else. If the scam has taken place on a fraudulent website or email, you should report the activity to your local police, as well as the Federal Trade Commission (FTC)Opens in New Window.

Additionally, call your bank, credit union, or credit card company if you’ve sent funds to a suspected fraudster. If you act quickly, your financial institution may be able to stop the payment before it leaves your account. Otherwise, they may be able to take action to trace the scammer and get your money back.

If you’ve revealed personal identifying information, you may also want to place a freeze on your credit reports through TransUnionOpens in New Window, EquifaxOpens in New Window, and ExperianOpens in New Window. Freezing your credit will prevent the scammer from being able to take any further action, if they’re attempting to steal your identity. You should also alert each credit bureau individually.

Protect Yourself by Partnering With Lafayette Federal

At Lafayette Federal Credit Union, we are committed to protecting your security by helping to safeguard your money and your identity. Contact usOpens in New Window to learn how we can work with you to boost your financial well-being.

Not a Lafayette Federal member yet? You can become a member by completing an online membership applicationOpens in New Window.

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