Holiday Season Is When Scam Artists Go to Work

Halloween kicks off more than the holidays. It’s the start of the peak fraud season. And if you think the goblins wandering around tonight are frightening, get a load of the real-life ghouls who rip off your credit cards or masquerade as representatives of charitable organizations.

Con artists are out in force because consumers are more vulnerable during the holidays, experts say.

“People are preoccupied and a bit more sentimental during the holidays, which makes them less skeptical than they otherwise would be,� says John F. Barker, vice president of the National Consumers League in Washington. “When you’re preoccupied, your normal (fraud) detectors aren’t working, so you’re more likely to say, ‘Yes, yes, yes,’ when you should be saying, ‘No, no, no.’ �

What types of fraud proliferate at this time of year?

All types of credit card fraud, from pilfering to impersonation. Bankers estimate that credit card fraud increases 10% to 15% in these three months. Employment scams also start to crop up in large numbers at about the time people are worrying about having enough money for the holidays. Bogus charities call for holiday donations. And you’re far more likely to win a sham contest--one that’s designed simply to get your credit card or bank account information--between November and January than during the rest of the year.

However, there are a handful of simple strategies you can use to protect yourself. Specifically:

* Guard your wallet. Pickpockets look for easy targets, and an easy target is somebody whose wallet is visible and easily accessible. When possible, men should carry their wallets in inside coat pockets rather than back pants pockets. That’s because a coat makes it harder to tell where the wallet is--and harder to get at once it’s found.

Women should zip or snap their purses rather than leave them open. And both men and women should consider putting a rubber band around their wallets. Why? It causes friction, making it tougher for a pickpocket to pass undetected.

* Carry only the cards you need. Most people go holiday shopping with a fistful of credit cards at the ready, but you probably need only one or two. If you carry only what you need, thieves get less and you have fewer stolen cards to report and replace.

* Remember your checks. Most people think to report stolen credit cards but don’t worry too much about their checks. As a result, check fraud has soared. If your checkbook--or even a single check--is stolen, report it to your bank. The bank will probably tell you to close your account and open a new one. Most banks will work with you to pay any outstanding checks while rejecting newly drafted forgeries.

* Beware of callers. There are three popular holiday phone scams: the contest, the sale and the charity.

The contest scam involves phone callers who say you have won an expensive prize. But you need to give the contest representative your credit card number “to verify� that the winner is you. You’ll never get the prize, and your credit card number will be used on an exciting buying spree without you.

There’s another scam where you’re supposed to send a check or money order for “postage and handling� of your expensive gift. But the charges for postage and handling almost always cost more than the value of the prize, experts say. The only winning move: hang up.

The sale scam involves a caller offering a terrific discount on anything from cleaning supplies to holiday gear. Send them a check or give them your credit card number and you may end up with a cheap product that bears little resemblance to what was advertised. Or you may get nothing at all.

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The charity scam is possibly the most onerous. Bogus charities often use names that differ only slightly from those of legitimate concerns.

When a charity calls asking for donations, ask the solicitor to send you information. Legitimate concerns usually don’t mind mailing out information and letting you mull contributions at your leisure. On the other hand, scammers want you to part with your cash quickly. They may even offer to pick it up. Don’t give in to haste.

If you’re not familiar with the charity but want to give, check the group out with the Philanthropic Advisory Service in Washington, the Charity Information Bureau in New York or your state agency that handles charities.

* Avoid employment scams. At roughly the same time people start worrying about whether they’ll have enough money to buy Christmas presents, advertisements start appearing for part-time workers. “You can earn $1,000 a week, working from home.� You can also win the lottery, but it’s not likely. Any employment offer that requires you to send money for more information is probably bogus.

* Watch pre-approved credit cards. There are two types of pre-approved credit card offers--legitimate and bogus--and both pose risks.

Scores of legitimate pre-approved credit card applications are sent during this time of year to good credit risks because credit card companies know that roughly 40% of all retail sales are made during the holidays, says Robert McKinley, president of RAM Research & Publishing Co. in Frederick, Md.

People who get these applications all the time tend to throw the bulk of them away, unopened. That’s risky, because crooks “dumpster dive� for these solicitations, says Ruvan Cohen, director of marketing for Citibank MasterCard and Visa programs.

When they find the applications, they fill them out and get a credit card for you. They may change the address on the application, or they may attempt to intercept it at your mailbox. Either way, if you rip up applications you don’t want, you’ll reduce your chance of getting taken on a legitimate offer.

Meanwhile, bad credit risks also get pre-approved cards, often with high spending limits. The cards may promise low interest rates too. Good deal? Hardly.

What you don’t know until long after you’ve paid the fees is that you generally can use these cards only to buy overpriced goods from a catalogue.