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‘Tis the season to be jolly — and scammed.
Your cardholders are filling their stockings, dressing their holiday tables, and trimming their trees, which can leave them vulnerable to fraudsters and scammers. With so many transactions filling their bank statement, it can be easy to miss suspicious activity or share one’s credit card information with the wrong person.
One 2023 AARP survey found that 80 percent of U.S. consumers have either experienced or been targeted by some form of fraud that is common during the holidays, including fake requests from charities, online shopping scams, and fraudulent delivery issue communications.
That is why, this holiday season, SWIVEL® is making a list (and checking it twice) of the ways your financial institution can prevent holiday credit card-related scams.
Common Holiday Credit Card Fraud Scams
As the holiday season kicks into high gear, so does the potential for holiday scams. Consumers become prime targets for fraudsters during this busy shopping season, as credit card use skyrockets with online shopping, gift-giving, and holiday travel. Credit card fraud and related holiday scams rise significantly each year, targeting unsuspecting consumers. Common holiday scams involve everything from fake online stores to fraudulent charity drives, each designed to commit fraud and exploit consumers’ generosity.
Some of the most prevalent scams include:
- Fake Online Stores: Scammers create websites that mimic legitimate businesses, tricking consumers into entering payment information on fake websites that look authentic. Online shopping on these sites often results in fraudulent charges on victims’ credit card statements.
- Package Delivery Scams: With an increase in holiday shopping comes a spike in fake delivery notification texts. These messages often include suspicious links that redirect users to pages designed to collect personal identifying information. Scammers prey on consumers expecting packages, making these scams particularly effective.
- Gift Card Scams: Scammers leverage the popularity of gift cards, convincing consumers to purchase gift cards for phony reasons, like helping a “family member” in need. Sometimes, the scammers manage to deliver empty or invalid gift cards, leaving victims empty-handed.
- Fake Charities: Fraudulent charities pose as legitimate organizations to exploit consumers’ generosity. Through phone calls, social media ads, or fake GoFundMe campaigns, scammers attempt to collect financial information from kind-hearted individuals wanting to help a charitable organization.
- Phishing Emails and Scam Texts: Fraudsters send emails or texts claiming to be from reputable retailers or delivery services, enticing recipients to click on malicious links. Often, these scam texts are designed to steal credit card information or online account credentials.
- Money Mule Schemes and Fake Job Ads: Scammers post fake job ads, promising extra money during the holiday season. In many cases, the job requires the victim to transfer money or packages, unknowingly assisting in money laundering schemes.
- Romance Scams: Fraudsters leverage the holiday season’s emotional appeal, posing as romantic partners and convincing their targets to send money. These scams often involve requests for funds under the pretense of urgent financial needs.
- Grandparent Scams: Scammers impersonate a distressed family member, often a grandchild, in urgent need of money. By tugging on emotional strings, they deceive grandparents into sending money or purchasing gift cards.
Ways Your Financial Institution Can Help Prevent Credit Card-Related Scams
Financial institutions play a critical role in safeguarding their customers against credit card scams. From educating account holders to implementing advanced security measures, banks and credit unions have numerous tools to help mitigate the risk of credit card fraud during the holiday season. It is also crucial for customers to report any fraud to the Federal Trade Commission (FTC) promptly, and financial institutions can guide them in this process to ensure swift action and consumer protection.
Educate Your Account Holders
One of the most effective ways to protect customers from holiday scams is through education. Financial institutions should regularly provide information on how to avoid common holiday scams, including online shopping tips, identifying suspicious links, and spotting fake online stores. Educate account holders on:
● The importance of using reputable retailers and shopping only on verified websites with secure web addresses.
● Recognizing hard sell tactics, suspicious links, and deeply discounted prices that seem too good to be true.
● Keeping a close eye on their bank statements for fraudulent charges.
By educating customers on these topics, financial institutions empower them to protect their credit card information and prevent fraudulent activity.
Educate Your Employees on How to Spot a Scam
Employees should be trained to recognize signs of holiday scams and credit card fraud. Financial institutions can organize training sessions to teach employees how to spot red flags in financial transactions, especially during the busy shopping season. Essential topics to cover include:
● Recognizing unusual spending patterns that may indicate fraudulent activity.
● Understanding common scams, like phone scams or package delivery scams.
● Assisting customers who report suspicious activity on their financial accounts.
Employees can act as a first line of defense in preventing credit card scams by providing customers with advice and guidance.
Encourage Strong Password Usage
Weak passwords make online accounts more vulnerable to scams, especially during peak holiday shopping. Financial institutions should encourage customers to use strong, unique passwords for online banking, credit card accounts, and other financial accounts. Providing resources on creating strong passwords and the importance of regularly updating them can protect customers from identity theft and other online scams.
Provide 24/7 Customer Support
Holiday scams can occur at any time of day, which makes providing 24/7 customer support a great resource to allow customers to quickly report suspicious activity. A dedicated fraud support team can assist customers in addressing unauthorized transactions, helping to prevent further fraudulent activity on their credit or debit cards. Swift responses reassure customers that their financial institution prioritizes their security.
Utilize Fraud Detection Systems
Financial institutions can use advanced fraud detection systems that leverage artificial intelligence (AI) and machine learning to analyze customer transactions in real-time. These systems flag any suspicious or unusual activities that could indicate a fraudulent transaction. By identifying risks early, fraud detection systems help prevent financial loss and mitigate identity theft. Additionally, these systems can be calibrated to monitor for red flags specific to the holiday season, such as:
● Unusual spending locations or high-frequency transactions.
● Purchases from online marketplaces with no prior purchase history.
● Payments for “hard-to-find items” that may indicate impulse purchases from suspicious sites.
Offer Real-Time Alerts
Real-time alerts give customers immediate updates on their accounts, allowing them to stay informed of every transaction and respond quickly if they notice something suspicious. These alerts can notify customers of all activity, such as a large purchase, multiple attempts on an account, or unusual transactions, empowering them to respond promptly.
Invest in Information Security for Online Shopping
Investing in robust information security measures is essential for financial institutions looking to prevent credit card scams. Security measures like multi-factor authentication (MFA), one-time codes, and advanced encryption can protect against unauthorized access and fraudulent charges. Other security measures that can enhance protection include:
● Transaction Verification: Verification protocols help confirm any unusual spending behavior, providing an extra layer of security.
● Personalized Customer Alerts: Allow customers to set custom alerts for high-value transactions, large withdrawals, or international purchases.
● Enhanced Data Encryption: Encrypts sensitive financial information, making it difficult for fraudsters to gain access.
By prioritizing information security, financial institutions reduce the likelihood of credit card fraud and foster trust among their customers.
Let SWIVEL Help Make This Holiday Season Brighter
Don’t let these grinches spoil your account holders’ holidays. SWIVEL’s advanced technology protects your account holders’ transactions, ensuring a secure and smooth holiday season. With SWIVEL’s robust payment processing systems, fraud detection capabilities, and information security protocols, institutions can proactively protect their customers from holiday scams. SWIVEL’s solutions are designed to help financial institutions detect fraudulent transactions, monitor suspicious behavior, and quickly respond to any credit card fraud attempts.
Key features include:
● Advanced Fraud Detection: SWIVEL’s platform leverages AI and machine learning to analyze transactions, flagging any unusual patterns that could indicate holiday scams.
● Secure Payment Processing: With SWIVEL, financial institutions can ensure secure payment processing that meets regulatory standards and minimizes the risk of unauthorized access.
● Enhanced Customer Support Tools: SWIVEL provides tools to assist support teams in managing reports of credit card scams, fraudulent transactions, and other issues quickly and efficiently.
By partnering with SWIVEL, financial institutions gain access to tools that enhance security, minimize fraudulent charges, and support customer satisfaction. SWIVEL makes it easier to manage credit monitoring, fraud detection, and customer support, giving financial institutions an edge in the fight against holiday scams.
The Importance of Proactive Measures During the Holiday Season
The holiday season brings with it a high volume of credit card transactions, online shopping, and festive generosity. But with this increase in spending comes a surge in scam attempts. Financial institutions that take proactive steps to educate customers, enhance security, and offer real-time support can effectively shield their customers from falling victim to common scams.
The Federal Trade Commission (FTC) plays a crucial role in reporting holiday scams and protecting consumers. It is important to act quickly to report any fraud to your financial institution, local authorities, and the FTC to ensure swift resolution and consumer protection.
By implementing security measures, monitoring for fraudulent activity, and providing customers with valuable educational resources, financial institutions create a safer holiday shopping environment. As the holiday season approaches, now is the time to make these changes and help ensure that customers enjoy their holidays without the worry of credit card fraud.
Encourage account holders to stay vigilant and use secure payment methods when shopping online. Remind them of the importance of checking their bank statements regularly for suspicious charges, as well as the risks associated with sharing credit card information on unverified sites. Financial institutions can foster trust and loyalty by prioritizing fraud prevention and providing exceptional support to customers in need.
With SWIVEL, financial institutions can enhance their fraud prevention strategies, protect customers’ financial accounts, and make this holiday season one that’s memorable for the right reasons. Fill out the form below to learn more.
‘Tis the season to be jolly — not scammed.
