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The festive season can be one of the busiest times for businesses, but with most consumers now shopping online, this period can also be perilous for scams.

With most Australians growing accustomed to digital during COVID-19 lockdowns, customers now prefer online shopping to physical. According to the Digital Fraud Tracker study, last Christmas, more than three-quarters of customers did their holiday shopping online.

However, the increase of online shoppers makes this season even more dangerous for online fraudulent activity, with scams, account takeovers and illegitimate websites appearing more frequently. With online activity set to increase, businesses should be aware  of the potential threats they could face to prevent fraudsters from having a very merry Christmas!

Tips for staying Christmas-scam savvy

  1. Watch out for unusual transactions

It’s easy to get caught up in festivities, especially after a year of lockdowns, and forget to maintain vigilance during the holidays. Still, it’s essential to be even more vigilant this time of year. When it comes to your business accounts and customer transactions, keep a close eye out for any unusual purchases or high-value orders that are well above your average transaction price.

Any irregular behaviour during this time should be investigated, as fraudsters prey on the busyness of businesses during the holidays. If you notice anything unusual, make sure you verify your customer and check the delivery order details with them before you ship it.

However, it’s not just scammers you need to be aware of. A recent study by Merchant

Risk Council found 40 per cent of customers had falsely claimed fraudulent charges on their credit cards to receive refunds, while 33 per cent falsely claimed their packages never arrived or were unsatisfactory to avoid paying for them. Customers can be crafty too – so businesses must be observant on all fronts!

2. Be aware of account takeovers!

Account takeovers, where fraudsters impersonate a customer and take on their identity to a business, is a very common type of fraud during this period. In fact, in 2019, this type of fraud cost merchants $35 billion alone. Account takeover fraud usually occurs when someone gains access to a business account through a compromised password and then proceeds to access other tools and applications.

The difficulty with this type of fraud is, it isn’t always obvious that an account has been hacked, meaning a scammer can go undetected, causing havoc for some time before being caught. 

As a business, stay vigilant over the holidays and monitor your customer’s online behaviours. If you see a high cost or high volume transaction occur late at night, if a delivery address suddenly changes or a customer starts making unusual purchases, investigate further.

3. Be careful of scam websites!

Scam websites are also very popular at Christmas, with many new sites popping up promising significant discounts or highly sought after products. If you’re making any business purchases, be wary of any websites offering items that are out of stock elsewhere or are extremely rare.

These types of scam websites typically target people doing last-minute shopping or those who are time-poor. So, despite how busy this business period is, don’t fall into the trap of not properly assessing a website before making a purchase.

Red flags to watch out for include everything on the website being on sale (unless it’s marketed as a sale event) and unsafe purchase methods such as bank transfers. Always be wary of any website that includes bank transfers as a payment method, as there are no chargebacks with EFT and no way to reclaim the funds if it is a scam.

Make sure a website has a secure HTTPS page, check reviews and go over the business refund policy to assess whether it’s legitimate. Likewise, if your business doesn’t have policies in place, now is a good time to develop them to give your customers greater confidence at Christmas.

4. Don’t completely ‘switch off’ during Christmas, Boxing Day and NYE

Last but not least, it can be tempting for a business owner to ‘switch off’ over the holiday period, but this is exactly what scammers depend on. 

Think of the Christmas period as one of the busiest times of year for scammers, who, like bad elves, prey on the fact that most people’s attention is diverted with festivities. Very few people monitor their online activity over Christmas and New Year. Still, it’s actually the time of year your business should be most vigilant, as there are significant spikes in fraud at this time.

Encourage your customers to heighten their security around Christmas and update any passwords used across multiple accounts. After all, it’s better to be safe than sorry when it comes to online fraud!

Quick Statistics on Christmas Scams

A recent report by Shopify found that fraud rates have increased by 55 per cent since the beginning of the pandemic, and some of the most common tactics include phishing and bot attacks.

“Secret Sister” fraud is a social media scam that promises victims $360 in gifts if they send a $10 gift to an unknown recipient. This type of fraud is expected to increase during the holidays.

A study by Info Security Magazine found that 60 per cent of small to mid-sized businesses (SMBs) noticed that customers have been more worried about fraud during the pandemic, and 40 percent said customers had shifted to using more secure payment methods as a result.

Online shopping has become the new normal for many individuals, with 49 percent of consumers turning to digital channels for day-to-day purchases and 90 percent of those who do report they plan to continue this habit even after the pandemic recedes. This is expected to increase in the lead up to Christmas.


Read more: Smishing scams on the rise


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Caitlin Zotti

Caitlin Zotti

Caitlin Zotti is the Operations Manager of Pin Payments, joining the team with over 7 years’ experience across both finance and business. As the previous Company Operations Manager at a national retail distributor, Caitlin brings a breadth of experience across finance operations, systems integrations and stakeholder management.

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