Tips on how to avoid popular scams
As the holiday season swings into full gear, shoppers need to maintain their vigilance in guarding against fraud. While consumers navigate the tighter budgets this year due to higher inflation, fraudsters are likely doing the same, and will be extra desperate – and motivated – to take advantage of the seasonal rush.
Holiday fraud is a big business, and criminals stand to generate hundreds of millions of dollars in illicit gains during the shopping season. Combined retail sales for November and December could top $960 billion, according to a forecast by the National Retail Federation (NRF), an industry trade group. Fraudsters will be tapping into this volume.
Just for card payments alone, fraud rates in recent years have hovered around 7 cents per $100 of volume worldwide, according to the Nilson Report. By that measure, for every $100 billion in card volume during the holidays, thieves will siphon off $70 million.
The gap between self-perception and reality
Consumer gullibility turbocharges the payday for fraudsters. Nearly half (48%) of consumers globally are confident they can recognize a scam, according to a 2022 fraud report by Visa Inc. Yet almost three in four (73%) typically respond to terms or phrases scammers commonly use in emails and text messages, such as “Win online gift card” and “Act now.”
The vulnerability of the general population is still high: 63% incorrectly believe or are unsure that online retailers such as Amazon and eBay will request login information to provide customer support, according to a November report by AARP. And 53% incorrectly believe or are unsure that payment apps such as Cash App, Zelle, or Venmo have the same consumer protections as credit cards. About 4 in 10 said they believe (incorrectly) that ads for merchandise on social media online are trustworthy.
“Fraudsters are always working to outsmart consumers, but during the holidays, their fervor is especially acute,” says Kathryn Albright, Executive Vice President and Head of Global Payments and Deposits at Umpqua Bank. “Criminals exploit this time of year to prey on busy individuals who are pressed for time, luring them into traps and robbing them of their hard-earned money. But taking some simple precautions will help thwart these schemes.”
Individuals need to be especially aware of common holiday tricks used by thieves, such as:
- Gift card payment scams. Gift cards are a preferred method of choice for criminals, who convince consumers to pay a bogus financial obligation by purchasing gift cards and handing over the numbers to the fraudsters. Criminals also scam retailers by returning stolen merchandise to stores and receiving gift cards since they don’t have a receipt. They then sell those cards online at a discount. For the 12 months ended June 30, 74% of retailers reported this practice, according to the NRF.
- Charity scams. Fake charities use the holidays to lure victims to donate to bogus enterprises. They mimic real charities and often use terms such as “federal” or “national.” Criminals sometimes pose as religious leaders, preying on the generosity of others by telling a story about people in need.
- Non-delivery and non-payment crimes. In non-delivery scams, buyers pay for goods and services online, but never receive the items. For non-payment scams, it’s the merchants who are the victims, with goods and items shipped but are never paid. Losses for these two types of fraud amounted to $337 million in 2021, according to the Internet Crime and Complaint Center (IC3), a division of the FBI.
Tips to reduce the risk of fraud:
- Review your account activity regularly. Everyone should review personal financial accounts often for activity to make sure there aren’t any suspicious transactions. Consumers also should carry fewer cards in their wallets when they shop and store the others in a safe place at home.
- Don't click on email links. Fraudsters are getting better at impersonating retailers. But even when it seems real, it’s better just to go to the website via a browser. Bad links take consumers to fake portals, which typically ask for credit card information.
- Don’t give out sensitive information. When you receive a call, email, or text from someone claiming to represent your bank, or another company, do not give them your user ID or password. No legitimate company will ever ask you for this information.
- Watch for key fraud terms. Consumers fall for a variety of phrases, according to a report by Visa, including “Win online gift card,” “Exclusive deal,” “Act now,” “Click here,” “Limited time offer,” “Urgent,” “Action needed,” and “Free/giveaway.” Be on the lookout and steer clear of any correspondence containing this messaging.
- Stay on top of deliveries. Almost 3 in 10 (27%) of consumers reported having a package stolen outside their door, according to a November fraud report by AARP. Consumers should track various items for delivery. When consumers won’t be at home, they should call the retailer or delivery service and try to delay the shipment or arrange to have it sent to an office or designated receiving location, such as Amazon Hub Locker.
- Avoid clicking on ads. Malvertising is malicious advertising that often takes the form of pop-up ads. Similar to erroneous email links, these ads can lead you to sites that ask for personal information and credit card numbers. They can also infect your device with malware and make the season anything but merry.
- Don't shop on public Wi-Fi networks. If you're shopping online, do it at home using your own private, secure network. Cybercriminals can easily tap into public Wi-Fi, so you don't want to input passwords and visit your bank account when browsing on these networks.
- Use fraud alerts. Fraud alerts can be very helpful to consumers in staying on top of any suspicious activity regarding their accounts. Alerts can be tailored to transaction size, and are delivered via phone (voice), text, and email. Update any new contact information to keep accounts secure.
- Use cards rather than payment apps. Cards offer more protections. Those using major brands offer $0 liability for unauthorized charges. Peer-to-peer apps such as Venmo, Zelle, and CashApp process payments immediately, just like cash. These transactions cannot be reversed.
- Use caution when buying gift cards. Don’t buy gift cards outside of retailers and established companies. Look to make sure the protective stickers on the card are not tampered with. Also check to see that the PIN number on the back isn’t showing. Keep your receipt, which will help identify the card in case it is stolen.
“The holidays can be a stressful time of year, but don’t let the pressures get in the way of common-sense shopping,” Albright says. “Taking the time to safeguard your shopping and payment information online and in person will go a long way toward preventing anguish, and real losses to your household budget.”
What do if you have been compromised:
Take action immediately. Call the merchant and credit card bank to report the issue. For gift card scams, reporting to the retailer might help recoup the loss if the card hasn’t been used.
Notify regulators and law enforcement. IC3 tracks internet crimes, and the Federal Trade Commission monitors gift card scams. It also helps your community to report an incident to the state attorney general and local law enforcement.
Tips on how to avoid popular scams
As the holiday season swings into full gear, shoppers need to maintain their vigilance in guarding against fraud. While consumers navigate the tighter budgets this year due to higher inflation, fraudsters are likely doing the same, and will be extra desperate – and motivated – to take advantage of the seasonal rush.
Holiday fraud is a big business, and criminals stand to generate hundreds of millions of dollars in illicit gains in the last two months of the year. Combined retail sales for November and December could top $960 billion, according to a forecast by the National Retail Federation (NRF), an industry trade group. Fraudsters will be tapping into this volume.
Just for card payments alone, fraud rates in recent years have hovered around 7 cents per $100 of volume worldwide, according to the Nilson Report. By that measure, for every $100 billion in card volume during the holidays, thieves will siphon off $70 million.
The gap between self-perception and reality
Consumer gullibility turbocharges the payday for fraudsters. Nearly half (48%) of consumers globally are confident they can recognize a scam, according to a 2022 fraud report by Visa Inc. Yet almost three in four (73%) typically respond to terms or phrases scammers commonly use in emails and text messages, such as “Win online gift card” and “Act now.”
The vulnerability of the general population is still high: 63% incorrectly believe or are unsure that online retailers such as Amazon and eBay will request login information to provide customer support, according to a November report by AARP. And 53% incorrectly believe or are unsure that payment apps such as Cash App, Zelle, or Venmo have the same consumer protections as credit cards. About 4 in 10 said they believe (incorrectly) that ads for merchandise on social media online are trustworthy.
“Fraudsters are always working to outsmart consumers, but during the holidays, their fervor is especially acute,” says Kathryn Albright, Executive Vice President and Head of Global Payments and Deposits at Umpqua Bank. “Criminals exploit this time of year to prey on busy individuals who are pressed for time, luring them into traps and robbing them of their hard-earned money. But taking some simple precautions will help thwart these schemes.”
Individuals need to be especially aware of common holiday tricks used by thieves, such as:
- Gift card payment scams. Gift cards are a preferred method of choice for criminals, who convince consumers to pay a bogus financial obligation by purchasing gift cards and handing over the numbers to the fraudsters. Criminals also scam retailers by returning stolen merchandise to stores and receiving gift cards since they don’t have a receipt. They then sell those cards online at a discount. For the 12 months ended June 30, 74% of retailers reported this practice, according to the NRF.
- Charity scams. Fake charities use the holidays to lure victims to donate to bogus enterprises. They mimic real charities and often use terms such as “federal” or “national.” Criminals sometimes pose as religious leaders, preying on the generosity of others by telling a story about people in need.
- Non-delivery and non-payment crimes. In non-delivery scams, buyers pay for goods and services online, but never receive the items. For non-payment scams, it’s the merchants who are the victims, with goods and items shipped but are never paid. Losses for these two types of fraud amounted to $337 million in 2021, according to the Internet Crime and Complaint Center (IC3), a division of the FBI.
Tips to reduce the risk of fraud:
- Review your account activity regularly. Everyone should review personal financial accounts often for activity to make sure there aren’t any suspicious transactions. Consumers also should carry fewer cards in their wallets when they shop and store the others in a safe place at home.
- Don't click on email links. Fraudsters are getting better at impersonating retailers. But even when it seems real, it’s better just to go to the website via a browser. Bad links take consumers to fake portals, which typically ask for credit card information.
- Don’t give out sensitive information. When you receive a call, email, or text from someone claiming to represent your bank, or another company, do not give them your user ID or password. No legitimate company will ever ask you for this information.
- Watch for key fraud terms. Consumers fall for a variety of phrases, according to a report by Visa, including “Win online gift card,” “Exclusive deal,” “Act now,” “Click here,” “Limited time offer,” “Urgent,” “Action needed,” and “Free/giveaway.” Be on the lookout and steer clear of any correspondence containing this messaging.
- Stay on top of deliveries. Almost 3 in 10 (27%) of consumers reported having a package stolen outside their door, according to a November fraud report by AARP. Consumers should track various items for delivery. When consumers won’t be at home, they should call the retailer or delivery service and try to delay the shipment or arrange to have it sent to an office or designated receiving location, such as Amazon Hub Locker.
- Avoid clicking on ads. Malvertising is malicious advertising that often takes the form of pop-up ads. Similar to erroneous email links, these ads can lead you to sites that ask for personal information and credit card numbers. They can also infect your device with malware and make the season anything but merry.
- Don't shop on public Wi-Fi networks. If you're shopping online, do it at home using your own private, secure network. Cybercriminals can easily tap into public Wi-Fi, so you don't want to input passwords and visit your bank account when browsing on these networks.
- Use fraud alerts. Fraud alerts can be very helpful to consumers in staying on top of any suspicious activity regarding their accounts. Alerts can be tailored to transaction size, and are delivered via phone (voice), text, and email. Update any new contact information to keep accounts secure.
- Use cards rather than payment apps. Cards offer more protections. Those using major brands offer $0 liability for unauthorized charges. Peer-to-peer apps such as Venmo, Zelle, and CashApp process payments immediately, just like cash. These transactions cannot be reversed.
- Use caution when buying gift cards. Don’t buy gift cards outside of retailers and established companies. Look to make sure the protective stickers on the card are not tampered with. Also check to see that the PIN number on the back isn’t showing. Keep your receipt, which will help identify the card in case it is stolen.
“The holidays can be a stressful time of year, but don’t let the pressures get in the way of common-sense shopping,” Albright says. “Taking the time to safeguard your shopping and payment information online and in person will go a long way toward preventing anguish, and real losses to your household budget.”
What do if you have been compromised:
Take action immediately. Call the merchant and credit card bank to report the issue. For gift card scams, reporting to the retailer might help recoup the loss if the card hasn’t been used.
Notify regulators and law enforcement. IC3 tracks internet crimes, and the Federal Trade Commission monitors gift card scams. It also helps your community to report an incident to the state attorney general and local law enforcement.
Umpqua’s crowdfunding partnership with Kiva inspired more than 10,000 community members to help entrepreneurs in Oregon, Washington, California, and Idaho start or grow business
PORTLAND, Ore., (November 9, 2022) Umpqua Bank, a subsidiary of Umpqua Holdings Corporation (NASDAQ: UMPQ), has announced that its innovative crowdfunding partnership with Kiva has reached the initial goal of deploying $1 million in microloans. Since April, the Umpqua Bank Loan Fund has supported nearly 200 BIPOC and women entrepreneurs, addressing a critical gap in access to funding for many small business owners.
Umpqua established its $1 million loan fund with Kiva earlier this year as part of its Small Business Empowerment Program to accelerate the ability of underserved entrepreneurs to access microloans offering 0% interest. Umpqua’s loan fund matched contributions from thousands of individual funders 3:1 for eligible entrepreneurs in Oregon, Washington, California, and Idaho.
“Creative partnerships with organizations like Kiva are critical to expanding the funding ecosystem for small businesses so more entrepreneurs can access the capital and resources needed to succeed,” said Eve Callahan, Umpqua’s chief marketing communications officer. “In just a few months, our Umpqua Bank Loan Fund through Kiva has helped nearly 200 under-resourced entrepreneurs access early-stage capital that’s so important in starting and growing a small business.”
“We join the team at Umpqua in celebrating this incredible milestone, which we achieved far more quickly than we’d initially expected,” said Tess Murphy, Director of Strategic Partnerships at Kiva. “It’s innovative partnerships like these that enable Kiva to continue growing our impact, allowing us to reach even more entrepreneurs with critical access to funding. We’re grateful to work with Umpqua to address the funding gaps for small business owners.”
The Fund in Action
To date, 185 business owners have been supported through the fund, which matched loans crowdfunded by more than 10,200 people across the globe. The businesses supported by Umpqua-matched loans represent a range of sectors including the service industry, food, retail, health, agriculture, education, arts and entertainment, and more. The average loan amount across all borrowers so far has been $8,300. The Umpqua Bank Loan Fund replenishes as loans are repaid, multiplying the bank’s initial $1 million commitment.
Of the 185 businesses supported through the Umpqua Bank Loan Fund:
- 60% were directed to women business owners
- 42% were directed to Black and African American business owners
- 22% were directed to Latine and Hispanic business owners
- 32% have been in operation for three years or more
- 26% have been in operation for one year
Businesses supported by Umpqua and Kiva partnership
A representation of the businesses supported by the Umpqua Bank Loan Fund include:
- Sibeiho, based in Portland, OR, a Singaporean food startup co-founded by Holly Ong and Pat Lau
- In Focus Productions, based in Lakewood, WA, a Veteran and Black-owned photo and videography production company founded by Darwin Peters and Shartrice Peters
- Serenity Valley Flower Farm, based in Gig Harbor, WA, a black woman-owned and operated sustainable floral microfarm founded by Susanne Bell
- Blynd Essence, Inc, based in Fresno, CA, which provides affordable shared housing for individuals with mental illness and financial hardship, founded by Rizpah Bellard
- Umi Organic, based in Portland, OR, which produces delicious Japanese food products through organic farming methods, founded by Lola Milholland
How Kiva works
Through Kiva, anyone can help support and grow small businesses and promote local job creation by visiting Kiva.org and choosing an entrepreneur they want to support with a loan of $25 or more. Entrepreneurs apply directly to Kiva’s U.S. site to fundraise on the platform and are connected to millions of Kiva lenders. It also enables local lenders to make direct loans to entrepreneurs in their neighborhoods. Small business loans crowdfunded through Kiva U.S. are offered at 0% interest with no fees and available to borrowers who may be rejected or underserved by traditional lenders.
About Umpqua
Umpqua Bank, headquartered in Roseburg, Ore., is a subsidiary of Umpqua Holdings Corporation and operates across Oregon, Washington, California, Idaho, Nevada, Arizona, and Colorado. Umpqua Bank has been recognized for its innovative customer experience and banking strategy by national publications including The Wall Street Journal, The New York Times, BusinessWeek, Fast Company and CNBC. The company has been recognized for eight years in a row on FORTUNE magazine's list of the country's "100 Best Companies to Work For," and was recently named by The Portland Business Journal the Most Admired Financial Services Company in Oregon for the 17th consecutive year. In addition to its retail banking presence, Umpqua Bank also owns Financial Pacific Leasing, Inc., a nationally recognized commercial finance company that provides equipment leases to businesses.
About Kiva
Kiva is a global nonprofit, founded in 2005, with a mission to expand financial access and help underserved communities thrive. Kiva unlocks capital for borrowers through crowdfunded loans supported by individuals around the world. With as little as $25, you can support entrepreneurs and small business owners in communities across the country and globe with critical access to funding. Over two million people have invested $1.7 billion in real dreams and real opportunity, spanning more than 70 countries and 4.2 million borrowers.