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12 scams of Christmas #1: Online Payments

Avoid paying online with a debit card
Posted at 12:07 PM, Dec 12, 2019
and last updated 2019-12-12 13:07:12-05

We are working for you to keep you from getting scammed this holiday season.

That's why we're starting a new feature called the "12 Scams of Christmas."

For the first scam of Christmas, a warning about unusual payment methods while shopping online, where thieves keep your money and you end up with nothing.

You may be tempted to use your debit card to avoid going into debt but if you're buying something online, experts say you should only pay with a credit card.

Let's say you find that one-of-a-kind gift but the seller is specific about how you pay, Accounting Professor J.P. Krahel says, "Avoid anyone who defines how you can pay them."

Krahel says if you're unsure of the seller, credit cards offer you the best protection from fraud.

"So people who get scammed via credit card, they've got recourse, they can go to the credit card company and say hey, listen this wasn't me, I was scammed, they may be able to find relief."

Unlike debit or cash apps, there's a third-party between your money and the person you're giving it to.

And while peer-to-peer payment services like Paypal, Venmo, or Zelle seem reputable and safe, that's not always the case.

"Zelle is a digital wallet, it's an ability for you to reach in and just give cash out, there's very little protection there," Krahel says.

Scams are a little more obvious when the person asks for payment via iTunes gift cards or something else.

Krahel says, "Are they demanding I make a payment in a certain way because they know they get all the protection and I get none?"

But also be very suspicious of wire requests and Bitcoin, Krahel says, "Forms like Bitcoin is the least protected form of payment. Once I send that out, I will never find it again, there is no protection there."

So only use apps like Venmo, Zelle, Facebook and Google pay with people you know.

Venmo even says it in its terms, it's not to be used for payment of goods or services unless it's with an authorized merchant.

Coming up tomorrow morning, part two in our "12 Scams of Christmas," we'll be covering job scams.

Beware of online ads posted by scammers, promising you'll make some extra cash fast.

We'll show you how to avoid getting ripped off, that's tomorrow morning in the 6 a.m. hour.

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