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Finance scams tick up during the holidays; here's how to avoid them

Much like depression and weight, financial scams tend to tick up during the holiday season. The most recent survey from the Association of Certified Fraud Examiners says that fraud ticks up 20% in the holidays, likely due to increased financial pressure. But not all of these scams are the credit card schemes you see on the news.

Marketplace Weekend anchor Lizzie O’Leary asked her listeners to share financial horror stories and found that rather than falling prey to organized schemes, most people got duped simply by being human.

“The threat that ran through all of them was vulnerability and sort of the soft under belly of what makes us people,” she said. Not surprisingly – one area where people are at their weakest in this regard is online dating web sites.

"There was a woman who had gone back on to OKCupid she’s looking for love, and she starts talking with a guy. It seems like things are pretty good, and then he starts asking her some slightly weird personal questions. And he hasn’t asked for money yet, but he’s asking for a lot of things. Then he calls from some unidentified numbers. Then he calls from a Nigerian number and she starts to associate it with sort of famous Nigerian e-mail scams, puts these two things together [and] she extracted herself before she got into financial hot water."

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This woman is not alone. A man in New York is suing OKCupid, alleging a date swindled him out of $70,000.

It turns out a lot of the questions that couples discuss in the early days of dating - like what city you were born in, or birthdays, are common security questions that can aid scammers trying to target your information.

This type of entanglement is so common that each year the FBI publishes an online dating financial scam warning on its website in honor of Valentine’s day. Some of the things the Feds caution against, though, are seen as fairly routine in the online dating world – like pushing to communicate over personal e-mail or IM instead of via the site. Others, though, may seem more obvious – like photos that look like they’re from a magazine, or instant professions of love.

The Association of Certified Fraud Examiners says fraud ticks up during the holiday season, particularly among employees.

But those looking for love aren’t the only ones susceptible to scams. Another story relayed by O’Leary involved a chef. “Some folks came to him and said we want to open a restaurant with you; it will be a great partnership; we’re going to use your name; you’re the star,” and the chef and his wife signed on the dotted line. The problem? In addition to being a named partner for the restaurant, the chef and his wife entered into a full-on business partnership, so when the restaurant failed, the couple was legally responsible for a whole slew of debt.

According to O’Leary, it’s not uncommon for people not to check the fine print in situations like this, when ego is at play.

As for tips on how to prevent these types of scams? The first – always read the fine print. You might say “use common sense” but as we’ve just proven, common sense is not always common in real life. As a general rule, remember to be skeptical. The second – always lawyer up. “Nobody likes lawyers, but they really do serve a purpose in these cases,” she said.

And it's not just on an individual basis. Small business owners and managers should beware as well, especially during the holidays. That same report from the Association of Certified Fraud Examiners says the most common holiday crime is employee embezzling. And what's worse - even though this type of activity ticks up during the holidays, the amount of resources devoted to protecting people and companies from them does not.

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