You better watch out, because the Better Business Bureau (BBB) released its annual “Naughty List” of top holiday scams shoppers can expect this season.
Fortunately for consumers, the ethical marketplace non-profit also released tips on how to avoid being defrauded.
“While 2021 is quickly winding down, scams targeting the public continue to cause trouble,” the company wrote in a statement, adding that shoppers are particularly vulnerable to scams operating on social media platforms. “Consumers should watch out for any fraudulent schemes aimed at swiping their cash and stealing personal information.”
The BBB found misleading social media ads were the most commonly-reported type of scam across all of 2020 and was also the category with the most victims, making up around 38% of the total reports the bureau received over the course of last year.
The BBB expects the trend to continue this holiday season, and is warning consumers to be wary of ads offering free trials, charity donations in exchange for purchase or deep price cuts on typically pricey items. Concerned shoppers can look up a business’ reviews on the BBB website, and can also submit a report if they believe they’ve been scammed.
Social media gift exchanges have become increasingly popular in recent years, leading to more ample opportunities for scammers to steal personal information from unsavvy shoppers.
The trend emerged several years ago through Facebook, when a so-called “Secret Sister” post went viral promising to exchange up to 36 gifts for a $10 buy-in fee. A newer version of the scam, called "Secret Santa Dog,” asked users to buy a $10 gift for a dog in exchange for presents of their own.
The BBB has repeatedly warned that “Secret Sister” and other related exchanges are actually pyramid schemes, which are illegal in the U.S. and Canada. According to the U.S. Postal Inspection Service, pyramid schemes are, “similar to a multilevel marketing system, [but] pyramid schemes promise investors large profits primarily based on recruiting others to join their program, not based on profits from any real investment or real sale of goods to the public.”
The BBB offers four specific tips to avoid pyramid schemes that originate on social media: Ignore the offer, report the social media posts, never give personal information to questionable people or businesses online and be wary of claims that seem too good to be true.
Parents should also be wary of scams on holiday-themed apps, some of which became more popular during the coronavirus pandemic, when many opted out of mall visits with Santa or group caroling.
“Apple's App Store and Google Play list dozen[s] of holiday-themed apps: children can video chat live with Santa himself, light the menorah, watch Santa feed live reindeer, track his sleigh on Christmas Eve, or relay their Christmas wish-lists,” the BBB wrote in part. “Before allowing a child to download any app, be sure what data it's collecting and set permission requirements.”
BBB says parents should read the fine print before downloading apps that might request or gather personal information like email, address or phone number, or that may require additional in-app purchases. But even free apps, some of which do not “display advertising might have third-party code collecting data for later ad targeting.”
Pet scams, which are common during the holiday season, increased exponentially during the coronavirus pandemic, and experts warn there may be an influx of misleading animal adoption offers online.
The BBB recommends anyone trying to purchase a pet should request to see the animal in person before offering payment, and should only buy from reputable organizations or breeders.
The BBB received 4,300 reports of pet scams last year, up from 1,870 the year before. Around 70% of people lose money from such schemes, and the median amount lost to pet fraud last year was $750.
See a full list of the BBB’s top holiday scams here.