Holidays Mean Dealing With Fraud

Frauds and scams tend to rise around the holidays, when busy consumers are distracted or rushed. (Wellesley Consulting Services file photo)

Every holiday season a number of scams make an appearance in an effort to deprive the unsuspecting of their money and purchases.  This year is no different.  Here follows a quick survey of some recent well-known scams this holiday season.

Holiday Loan Scam

Money is often tight for families around the holidays, especially with the economy being what it is these days.  The Herald Bulletin reported last week that a 78-year-old Indiana woman was targeted in an advance-fee-loan scam.  I order to receive her loan of about $1,000, which the woman wanted for Christmas shopping, all she had to do was wire a payment for $172 to “prove she could make the payments”.

The scam loan was interest-free and was offered without the need for a credit check.  The initial payment had to be sent by Western Union.  When the victim’s daughter phoned the wire payment service they told her it was a scam, and no funds were lost as a result.

Consumers should always be suspicious of any unsolicited loan offers that request an up-front payment.  These advance-fee-loans are specifically prohibited in many jurisdictions, including Ontario.  Normally, small lenders will deduct any charges from the amount loaned, or recoup their costs through higher interest rates.

Holiday Travel Scam

Several stories have been in the news recently about this scenario, where an attractive holiday property is offered for rent, usually at great rates.  The catch?  The person posting the rental ads doesn’t own the property!  And by the time the unsuspecting victim finds out, they’ve already made downpayments on the rental, and the scammer is nowhere to be found.

A variation on this was reported in Somerset, England, last week, when a couple who really did own a holiday villa in Mallorca, Spain, booked rentals to several people for the same period.  In total, the owners netted over $200,000 in the scam, which saw 19 bookings for the property, which had previously been rented to a businessman on a 12-month lease.  The owners pleaded guilty in the scheme, which occured in 2009, and were jailed last week, and ordered to repay victims a portion of the proceeds.

Charity Scams

The Oye! Times is reporting an RCMP warning about charity scams, with tips for avoiding them. During the holidays, charitable giving tends to go up, if for no other reason than the December 31 tax deadline for making contributions tax deductible.

Any charity that is authorized to issue tax receipts is listed on the Canada Revenue Agency website (www.cra-arc.gc.ca).  If they are not listed, beware that your donation may not be headed to a legitimate charity, or at the very least, you will not receive a tax deduction receipt.

Those soliciting for charities should have photo identification issued by the organization, and at the very least, a charity that is not as well know should be able to provide information about its charitable goals, business office location, and other organizations it supports or works with.