Holiday Shopping: Rising Threats from Fraud and Scams

A panel of experts from the ‘Barron’s Roundtable’ has highlighted concerns over the increasing prevalence of fraud and scams affecting the holiday shopping season. As consumers prepare for Black Friday and holiday purchases, fraud prevention experts warn of sophisticated scams fueled by advancements in technology.

A recent survey has shown that 82% of consumers have encountered some form of fraud in the past year. Director of the AARP Fraud Watch Network, Kathy Stokes, speaking to FOX Business, emphasized the need for caution when shopping online. Consumers are advised to verify links in emails, texts, and ads before clicking, as these could lead to malicious websites attempting to steal payment information.

Further compounding the issue, a report released by McAfee as part of its 2024 Global Holiday Shopping Scams Study revealed that 58% of scam victims have lost money, with the Federal Trade Commission reporting $95.2 million lost in the holiday season alone last year.

The report details how criminals are leveraging technologies such as artificial intelligence to craft highly convincing scams. Generative AI, in particular, is used to create realistic mimicries of legitimate seller sites and advertisements, sometimes including deepfake technology for fake celebrity endorsements.

Cliff Steinhauer from the National Cybersecurity Alliance explained that scam websites might feature well-crafted marketing emails and ads using fonts and designs that closely resemble those of authentic retailers. He advises shoppers to verify URLs directly by visiting retailer websites instead of relying on links provided in emails or ads.

Shoppers are also encountering fake notifications from delivery service providers like USPS and FedEx, which attempt to gather personal information on the pretext of delivery problems. The survey indicates an uptick in such fraudulent notifications from 2022 to 2023.

Despite the increasing sophistication of scams, many consumers remain unaware of safe online shopping practices. Stokes suggests using credit cards for transactions due to their stronger fraud protections compared to debit cards. Additionally, limited fraud protection offered by peer-to-peer payment apps adds another layer of risk.

As the holiday season approaches, officials urge consumers to remain vigilant, cross-reference information when in doubt, and refrain from clicking on emails and offers that seem unusually attractive.