Three types of scams typically increase during the holiday season. Scammers attempt to extract funds from unsuspecting individuals who are hoping to earn extra money for holiday spending, give money to charities, and shop for gifts online.
-- Earning: Many people want to earn extra spending money for holiday
shopping, and may be tempted by offers to "work at home" or become a
"mystery shopper" for a product or retailer. The recipient may be asked
to send a wire transfer or money order for a start-up kit, or the
recipient receives a large check to cash -- which turns out to be
fraudulent -- and is instructed to spend some of the money and wire the
rest back. Once the consumer sends the money, there is no way to get it
-- Giving: Legitimate charities increase their solicitations during the
holidays to take advantage of feelings of goodwill, but many scammers use
fake charities to try to steal money from well-meaning consumers. If a
charity isn't well known or sounds like a scam, consumers should check it
out thoroughly before making a donation.
-- Shopping: Products and deals advertised on the internet that seem "too
good to be true" probably are. Scammers entice consumers into believing
they're getting a deal, and ask for advance payment through a money
transfer or money order. Consumers won't receive the merchandise, and
they won't get their money back.
"Never wire money to someone you don't know," says Kim Garner, senior vice president of Global Security at MoneyGram. "Fraudsters don't take holidays so it's important for consumers to be alert to signs of possible fraud and follow the three R's rule."
-- Recognize: Savvy consumers should look for red flags when someone asks
them to send money through a wire service or money order, because
scammers often request these methods knowing that once the money is sent,
it cannot be retrieved.
-- React: When they identify a scam, consumers should immediately put an end
to any transaction or conversation -- hang up the phone, delete the email,
or end the back-and-forth messaging.
-- Report: Report the suspected scam to the local police, and file reports
with the Federal Trade Commission, National Consumers League, and
Internet Crime Complaint Center (if the suspected fraud was online).