The holiday season is here. That means togetherness, great food, and a long list of resolutions for the new year. However, there’s also a not-so-pleasant side: scammers are hard are work even during the most magical weeks of the year. Today we tell you how to steer free from two common holiday season scams.
1. Gift Card Scams
Gift cards are a common and convenient option during the holidays, but they are NOT to be used to make donations or tax payments.
Scammers often impersonate the IRS or another trusted institution and try to get people to pay fake tax bills or make donations via prepaid gift cards. Lots of people fall for this scheme every year, so the mere mention of a gift card should put you on alert automatically.
Pay Attention to These Red Flags
These are some red flags that can help you identify scammers using this tactic:
- They contact you unsolicited either by phone, email, text, or social media.
- The criminals may tell you that you are somehow linked to illegal activity (for example, that your identity has been stolen and used for fraudulent purposes).
- Perpetrators may resort to threats and/or harassment to get you to pay a fake tax penalty.
- They instruct you to buy gift cards from different stores.
- Once you buy the gift cards, they ask you to provide the gift card number and PIN.
What to Do if You Detect a Gift Card Scam Attempt
If you believe you have been targeted in a tax-related scam, you can use the IRS Impersonation Scam Reporting website or call 800-366-4484.
In the case of phone scams, you can report them to the Federal Trade Commission, making sure to add “IRS phone scam” in the notes.
If you receive threatening or harassing phone calls related to taxes, you can report them directly to the IRS to phishing@IRS.gov, including the phrase “IRS phone scam” in the subject line.
2. Fake Charities
Christmas is a time for giving. This noble idea is embedded in our collective consciousness, and scammers are just too happy to take advantage of it.
While helping others is particularly important this holiday season, don’t donate before doing some research to ensure that your hard-earned money is used to actually help someone in need.
If you are planning to donate, use this list of websites recommended by the Federal Trade Commission to do your research. If you want to find out whether the organization you have in mind is eligible for tax-deductible donations, then visit use the Tax Exempt Organization Tool created by the IRS.
Pay Attention to These Red Flags
Be on the lookout for these hints as you consider making a donation or when someone requests you to donate:
- They try to rush you into making a donation.
- They thank you for a donation you never made to pressure you into giving them money.
- The name of the supposed charity is similar to that of an established institution, but not the same.
- They guarantee sweepstake winnings if you donate (this is also illegal).
- They try to persuade you to pay by gift card (see the previous section of this blog) or by wiring money.
- Claims that your donation is tax-deductible when it’s not (use the IRS tool mentioned earlier to verify this).
If you identify a fake charity scam, don’t donate and don’t engage the scammers. Instead, report them online to the Federal Trade Commission and make sure to include the name of the charity and a brief explanation of why you think it’s a scam.