The holiday season is here. We see it everywhere with holiday ads that try to convince us that every gift is the perfect gift. While people tend to be more generous this time of year, fraudsters are happy to take advantage.
Gift Card Fraud
A popular holiday gift is a gift card. There are so many different kinds, and they are a great option for just about anyone. Gift cards are also a favourite target of fraudsters. In 2021, Canadian retailers reported $3.8 million in gift card fraud. Gift card fraud can be committed in different ways. Fraudsters can convince victims to provide the gift card information to the fraudster for a fictitious payment. Fraudsters may also tamper with the PIN shield or steal the barcode information.
Protection tip
When purchasing gift cards, ensure the packaging has not been tampered with and the PIN is not visible. Purchase gift cards from reputable providers. Retain the activation receipt and safeguard the gift card as if it were cash.
Food Fraud
Food fraud is another type of fraud we need to be on the lookout for this holiday season. Yes, you read that right. Food fraud happens more often than we realize as companies look to increase profits and fraudsters find opportunities to alter products. Food fraudsters often dilute high-quality olive oil with inferior oils, exemplifying a common tactic in their deceptive practices. The diluted olive oil compromises quality and cheats consumers of the genuine product they expect. Olive oil fraud is a growing concern as the demand for high-quality olive oil increases and production decreases.
Fraudsters mislabel honey by putting false information on labels. Honey makes a great gift in food baskets, but beware of adulterated products. Dishonest sellers cut honey with corn syrup or sugar, selling it as pure. Mislabeling also helps sellers evade tariffs and testing.
Protection tip
Mislabeling is more challenging to catch because, as consumers, we rely on labels to tell us the contents of a product. One way to check whether your honey is pure is to put a teaspoon of honey in a glass of warm water. If the honey dissolves easily, it is not pure honey. High demand and high prices make honey, like olive oil, a prime target for fraud. Choose carefully when selecting olive oil and honey gifts this season.
Wine Fraud
While food fraud poses significant risks to consumers, similar deceptive practices can also occur in the beverage industry, particularly with high-value items like wine. While wine is often considered a reliable gift choice, expensive bottles can sometimes fall victim to counterfeiting, potentially containing something different from what the label suggests.
In 2013, Rudy Kurniawan committed wine fraud, using dilution and forgery to convince the world’s most highly respected wine collectors that he had the most sought-after wines imaginable. In the end, Kurniawan was caught and convicted of his crimes, but his victims were defrauded of $1.3 million USD. Similar frauds have been discovered as recently as October 2024 in France and Italy.
Protection tip
When shopping for a good bottle of wine, check the label for inconsistencies and buy from a reputable provider.
Conclusion
As with all frauds, the best way to prevent fraud is to be aware that it exists and take reasonable precautions. Whether buying gift cards, purchasing a gift basket of food, or getting that special bottle of wine for that special gift, remember to take precautions to protect yourself from fraud this holiday season. Buy from reputable providers, research prices and availability, and check the labels. Remember that if it seems too good to be true, it’s probably fraud.
Kathleen O’Donoghue, CFE
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