Christmas shopping scams warning - how to protect your money

Whilst shopping for Christmas may seem harmless, there is now a high risk that more people could be caught out by a scam when shopping online.

We’ve already seen scams around self-assessment, pensions and even cryptocurrency, but in the midst of the high shopping season, shoppers are being warned to be on their guard or risk losing money.

UK Finance warns an estimated £95 million to £100 million could be lost in scams this month across more than 200,000 cases of fraud, in the lead-up to Christmas. 

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“We estimate that up to £100 million could be stolen via payment fraud in December alone, so please don’t give a gift to these callous thieves,” says Ben Donaldson, managing director of economic crime at UK Finance.

“Always take a moment to stop and think before parting with your information or money as only criminals will try and rush you. It could save your Christmas”

How do online shopping scams work?

Online shopping scams are designed to con you when you are making a purchase online.

Generally they involve the production of a spoof website, which is made to look as genuine as possible. This could be for a little known ‒ or even entirely invented ‒ retailer, but it could also be a mocked up version of the website of large online retailers like Amazon.

The idea is that the shopper is duped into believing they are purchasing an item from a genuine retailer, but you end up paying for something that will not arrive, and perhaps does not even exist.

According to a study from F-Secure, there are certain industries where these scams can prove particularly effective. These include targeting shoppers looking for fashion items, technology or even event tickets. The top 10 shopping scams are:

1. Fashion item 16%

2. Gifts 16%

3. Tech or IoT devices 15%

4. Beauty 13%

5. Food 13%

6. Sport gear 12%

7. Furniture or home dec 12%

8. Vehicles 12%

9. Travel 12%

10. Concert tickets / event tickets 11%

How can I protect myself from online shopping scams?

There are plenty of measures you can take to ensure that you are less likely to fall victim to an online shopping scam.

Check the website is legitimate

Ensure that you are using a legitimate website. There may be telltale signs that something is amiss ‒ obvious spelling mistakes, or issues with the website branding, for example. However, it could be something more subtle, like a slight tweak to the URL that you would have to go out of your way to spot.

There are also tools you can use to help you clarify whether a website is genuine or not, from the likes of F-Secure and Get Safe Online.

You can also  check whether a seller is registered on Companies House, plus check to see the business has a valid address. Lookout for these important red flags before parting with your cash.  

Do your homework

As with any purchase, it’s important to do your homework, so that you are confident in what you are buying. Checking reviews and social media is a good idea, though it pays to be somewhat cautious about trusting them too much. 

There have been issues in the past with people paying for fake reviews, to boost the attractiveness of the ‘products’ they are selling online. 

Don’t feel pressured to buy now

Most scams centre on presenting you with a deal that can’t be resisted, to the point that you feel you have to act quickly to take advantage. So take your time and carefully consider how realistic it is. If the price or offer seems too good to be true, then it likely is.

According to Barclays, 41% of people feel pressured to buy something quickly, and 42% would actually buy from an unfamiliar seller for ‘good price’.

Dr Peter Brooks, chief behavioural scientist at Barclays, says: “Sales are typically all about speed, and scammers will play on people’s emotions to instil a sense of time pressure or create a perceived scarcity for an item. They will also bank on people not doing the appropriate due diligence before making a purchase.”

“Never feel pressured into making a purchase, and if something doesn't feel right, take a step back and ask someone you trust – a family member, friend, or your bank – for advice.”

Look for the padlock

Looking out for a padlock next to the URL is a smart move too, since this means it is encrypted. Generally this suggests that the website is legitimate, since payments can’t be intercepted. However, it is possible for scammers to purchase or even forge this feature, so it’s no guarantee of authenticity but rather another helpful thing to check. 

Use a credit card for purchases

It’s also a good idea to think carefully about how you are going to pay for the item online. Credit card purchases enjoy greater protection than those made by debit card or other payment options, thanks to the Consumer Credit Act, so even if things go wrong you may be able to get your money back from the card provider. 

If the website encourages you to pay by bank transfer, that should be a warning that it may not be genuine. 

Social media scams

With more people also now buying on social media, shoppers are often reeled in via these platforms by advertising items that are in demand. Make sure you do your research before following a website and making a purchase. 

Are small retailers more susceptible to online shopping scams?

The F-Secure research found that more than half of shoppers avoid using small, independent businesses online because they feel less secure. While this is somewhat understandable, the reality is that large retailers can be impersonated just as effectively as smaller names ‒ restricting your shopping solely to the big names will not automatically protect you from scammers.

After all, data shows that small independents accounted for 27% of online shopping scams last year, which is only slightly above the 23% of scams involving large online platforms like Amazon and eBay, and the 21% which revolved around large retailers.