Better Business Bureau releases top scams to watch out for this holiday season

By Laura Zaccaro & Angeline Jane Bernabe

With the holidays fast approaching, the Better Business Bureau (BBB) is warning of the many ways consumers and donors could get duped this season.

Last week, the BBB released its "Naughty List: BBB's 12 Scams of Christmas," which details the top scams that are most likely to catch people off guard during the holidays.

The BBB, a Virginia-based nonprofit, urged consumers to beware of a variety of scams and exercise caution when coming across social media advertisements about discounted items. More than 20% of scams initiated over social media resulted in monetary loss, according to the BBB.

The most common scams reported to the BBB's "Scam Tracker" were related to online shopping fraud.

Here are the top three holiday scams that the BBB is telling consumers to watch for and how to avoid them:

1. Holiday apps

There are dozens of holiday-themed apps to watch out for during this time of year, according to the BBB. Many are targeted for children that say they can video chat live with Santa, light the Menorah, watch Santa feed live reindeer, track his sleigh on Christmas Eve or relay their holiday wish lists.

Last year, similar apps were used as children were forced to skip the traditional in-person visits with Santa amid the coronavirus pandemic. That may play a more important role than ever this year, the BBB said.

The primary concerns with these apps involve privacy, ads and the safety of the children using them. Before downloading a holiday app this year, the BBB advised parents to check the privacy policy. All apps should have easy-to-find privacy policies that detail what they are asking for, how it will be used and stored and how to opt out. If the privacy policy doesn’t have a list of parental rights or if it is hard to find, consumers should stay away, according to the BBB.

Moreover, the BBB urged consumers to think before downloading an app. Sometimes free apps may contain malware. To avoid this, make sure the app’s page in the app store has a privacy policy link as well as contact and address information for the app publisher. Another red flag could be that the app has crude designs or is imitating a commonly known cartoon or fictional characters, according to the BBB.

2. Social media gift exchanges

Social media gift exchanges have risen in popularity over the years, but there are several that the BBB is warning consumers about this holiday season.

The BBB said a newer version of this scam revolves around exchanging bottles of wine, while another suggests purchasing $10 gifts online. A similar scam asks unwitting participants to submit their email into a list where they get to pick a name and send money to strangers to "pay it forward." There is also a twist about a "Secret Santa Dog" where they buy a $10 gift for their "secret dog," according to the BBB.

In all versions of the scam, the BBB said participants unknowingly share their personal information along with that of their family members and friends, and they are further tricked into buying and shipping gifts or money to unknown individuals, which is an illegal pyramid scheme.

If you are invited to one of these social media gift exchanges, you should ignore it and report it, according to the BBB.

The BBB warned these schemes will try to win consumers over by saying it's legal and endorsed by the government -- but the government isn’t in the business of endorsing holiday gift exchanges. The scam will also ask for your personal information -- something you should never give out to strangers, otherwise it will open the door to identity theft and additional fraud.

3. Social media ads

Social media has played a huge role amid the coronavirus pandemic by inundating feeds with attractive ads. Some of these ads claim to be from small businesses or to support a charity, luring consumers to place an order or start a free trial. But what often happens is that the item is never received, you will get charged for the free trial that you never signed up for, or you’ll receive an item that is counterfeit or much different than what you ordered, according to the BBB.

The BBB urged consumers to protect themselves by doing their research. For example, do a quick online search for the business and find out if it has valid contact information. Doing a search for previous complaints is a good way to see if other consumers are complaining about the company. The BBB's "Scam Tracker" is also a useful tool.

For those making donations to charities this holiday season, the BBB said to use good judgment. Check to see if the charity mentioned in the ad really exists. Websites such as Charity Navigator are an easy way to to review charities.