Tis the season to be jolly! As everyone gears up for the holiday season with decorating, meal planning, shopping, etc., fraudsters are diligently working and planning on how they can execute holiday fraud this season. The holidays are known to be a very difficult time to detect fraud due to higher than usual transaction volumes, which makes it the perfect season for fraudsters to take advantage. The only way to avoid becoming a victim of holiday fraud is to stay ahead of the trends and develop a plan to stop fraud before it happens. These tips are ideal to share with your FI’s members/customers to help them stay informed and you stay out of the fraud fighting business this holiday season.
Most Common Types of Holiday Scams
The holidays are prime time for fraudsters because of all the holiday distractions they likely to target people who are too busy to notice the red flags of a possible scam. The most common holiday scams include:
Holiday Phishing Cons
Dear “Santa” Scams
Identity Theft and ATM Skimmers
During the holidays, warn your members/customers to not fall victim to pretend emails that contain bogus package tracking information from businesses or major retailers. These emails could infect their computer with a virus or download malware if they click on a link. Be aware of errors within the email such as: typos and grammatical errors, as these are common red flags of a phishing scam. It is important to confirm these malicious emails before opening any links, attachments, etc.
While there are legitimate organizations and businesses that sell letters from Santa, there are scammers and con artists who create fake organizations to steal credit card information and personal information while pretending to offer this service. Warn your members/customers to make sure to research the organizations and businesses who are selling these letters to verify they are legitimate.
Lots of shopping means lots of bags to carry around from store to store. Identity thieves see an opportunity to steal your wallet or look over your shoulder to copy your debit or credit card information. Fraud avoidance tip for your members/customers: While shopping, keep your wallets close and be aware of your surroundings to avoid your identity and information being stolen.
Why are the holidays prone to a high rise in fraud?
Fraud is a reoccurring issue that doesn’t seem to be going away anytime soon. And unfortunately, the holiday season is when we see the most fraud due to the high stress, large transaction volumes and new temporary employees who lack training on spotting fraud. The last few months of the year are when consumers do the most shopping and during this time, there are many reasons to go shopping: Thanksgiving, Black Friday sales, Christmas, etc. With all these reasons to shop during the holiday season, this provides fraudsters with the opportunity to scam consumers in various ways.
How Consumers Can Avoid Holiday Fraud
Don’t let the joy and jolly of the holiday season be ruined by fraud. There are many ways to avoid fraud this holiday season. Here are some tips to share with your members/customers:
Monitor bank accounts more frequently
Use credit instead of debit cards as they come with more fraud protections
Use one card for all purchases and leave other cards at home
Stay up-to-date on the latest fraud trends – this is a great time to encourage your customers and members to join your email list!
How Financial Institutions Can Stay Ahead of Holiday Fraud
A great deal of deposits and transactions are being made during the holiday season. It’s important for financial institutions to stay ahead of the game to avoid taking losses during this busy time.
Having a variety of tools, policies, procedures, and rules in place during the holiday season can help avoid taking fraud losses during the holiday season. All fraud departments should work together to notice trends or suspicious activity and have tools in place to react quickly to anything abnormal. For front line staff, extra training will help tellers stay aware of common holiday fraud scams, how to review the different kinds of fake checks, and then remind them what your FIs normal check cashing procedures are. (Sign-up for group training sessions today this month!)
Lastly, FI’s should keep constant communication with their consumers. Banks and credit unions should encourage consumers to receive text and/or email alerts of account activity, not to give out account information, and closely monitor monthly bank statements.
Cheers to your fraud-free holiday season!
— written by Advanced Fraud Solutions