Christmas scams have grown beyond overpriced hampers; even innocent e-greeting cards can be used against you.
Christmas is the season for giving but sadly, some see it as the season for profiteering.
In some cases, the troublemakers are businesses with unethical practices. In others, hackers and scam artists are using the growing trend of online shopping to rip off buyers, and even steal their identities.
Here’s what to watch for.
1. Fake Discount Sites
The first “discount scam” sites are already out, and their target this year are customers of jewellery store Pandora. Numerous “spoof” websites, which resemble the real Pandora website, are featuring “Christmas discounts” of up to 70 per cent.
These fake Pandora websites have fully functioning payment portals. When you enter your payment details, the websites send money from your credit card straight to the scammer – your purchases will never arrive. And that’s the least worst situation.
Scammers can also steal information that you key into the payment system, such as your name, address, credit card number, and phone number. Not only does this allow them to steal from your credit card, it gives them sufficient data to impersonate you – the scammers can then try other tricks, such as calling your bank or employer while pretending to be you.
Always check that the URL of the website is correct, before you grab that Christmas discount. Many scammers will slightly misspell the name of the website, and spoof sites often lack the “https://” which appears at the beginning of legitimate commercial websites.
2. Phishing Scams
Phishing broadly refers to the practice sending fake emails, to steal identities. These types of scams rise significantly around Christmas, as many people are sending or expecting deliveries.
Scammers send emails claiming that a particular delivery has been delayed, or has gotten lost. To resolve the situation, there’s a link you need to click, or a downloadable document that explains the refund policy.
Should you click either of those things, you’ll end up installing malware on your computer, which lets hackers access your files and accounts.
In other cases, the scammer will begin a conversation over email or even call you, pretending to be a service representative. They’ll ask for details such as when you paid for the delivery, how you paid for it, and what your credit/debit card number is so they can “verify” it.
If you surrender such personal information, the scammer can get away with your credit card details, and go on a shopping spree. Always pause before clicking a link, or downloading something. Call the relevant companies, to ensure the email is genuine.
3. E-card Phishing
This is similar to point 2. The only difference is that, instead of sending an email claiming delivery issues, the scammer sends an electronic greeting card (E-card).
These “Merry Christmas” E-cards are quite cleverly done – by dredging up information via Facebook and Twitter posts, a scammer can make them quite realistic. The scammer might put a picture of you and your friends on the cover, for example.
This will usually get you to click “open” or “download” before thinking, because the image lowers your guard. From there, things work much like a regular phishing scam.
4. Hotel Bait-and-Switch
This scam is always popular around holiday seasons, and that’s for one simple reason: it’s not actually illegal. It’s deceitful and costs you money, but there’s no real action you can take against the perpetrators.
With this scam, hotels advertise super-low rates on booking sites. When you actually turn up, they’ll tell you that they’re overbooked. They can accommodate you, but with an upgraded (read: more expensive) room,
During most times of the year, you can get angry and leave. Unfortunately, this is a peak holiday period – it’s likely that all the major hotels nearby are already filled to capacity. Even if you can find a room, the price will be astronomical; perhaps even worse than just paying for an upgraded suite at your original hotel.
The best way to avoid this is to read hotel reviews carefully. Most guests will leave angry comments about hotels that do this. Also, apply the old adage that if it’s too good to be true, it probably is. A S$200 a night room at S$50 is almost certainly a scam of some sort.
5. Christmas Hamper Rip-offs
This is another scam that’s sadly legal. This one takes advantage of consumer laziness, especially when it comes to buying gifts for corporate clients.
Rather than pick gifts individually, it’s tempting to resort to the old Christmas hamper. These can range in price from S$25 to well over S$500, depending on the items in them. And as they’re often purchased on corporate credit cards, most people don’t nitpick over what’s actually in them.
But you might want to save your company (or yourself) some money. Christmas hampers are notorious for being consumer rip-offs, in virtually every part of the world. If you calculate the total value of items in the hamper, the final price could be 20 to 30 per cent more expensive than if you just buy the items individually.
Some stores defend this by saying you pay for convenience – they’ve helped you wrap the items nicely, and selected based on theme. But is it really worth the massive price difference?
6. Aggressive “Payday Loans”
Financial predators often surface around Christmas. They’re looking to take advantage of cash-strapped parents who want to please their children, or retirees who want to buy a pricey laptop for a grandchild.
You may notice the number of unsolicited text messages rising on your phone. Offers of quick cash, or “low interest” loans. Some of these are even from unlicensed moneylenders, whom it’s illegal to engage.
No matter how cash-strapped you are, avoid these lenders of last resort. Even a licensed moneylender can have rates as high as 36 per cent per annum (bank personal loans are only six to nine per cent per annum); and many of them may use tricks like hidden processing fees to wring you for more.
Borrow money from these people, and you’ll probably still be paying back the debt next Christmas. Always buy within your means, especially if you’re a parent (staying financially stable is the best gift for your children).
7. Voucher Scams
Watch out for your Christmas vouchers, and read the terms carefully. Many of the details are hidden in the fine print.
For example, you may have a S$50 store voucher… which is only valid for a total purchase of S$300 or more. This is probably written in tiny letters, on the back or bottom of the voucher.
Some retailers count on you being too busy or tired to care – since you’re already in the store, and you’ve already picked out your gifts, you’ll probably cave and “top up” your purchase to get the discount.
Besides these tricks, the vouchers often come with a request for your contact details. This is an opportunity for the retailer to bombard you with further advertisements, to entice you to spend more. Sign up for even one voucher, and you’ll be amazed at the amount of junk mail you get this Christmas.
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By Ryan Ong
Ryan has been writing about finance for the last 10 years. He also has his fingers in a lot of other pies, having written for publications such as Men’s Health, Her World, Esquire, and Yahoo! Finance.