A stocking full of scams, rip-offs and dodgy deals

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By Rachel Jones
Know Your Money Editor

It is the time of the year again where panic sets in as people up and down the country realise just how few days are left to cram in the Christmas shopping. But an eagerness to part with cash in return for some festive gifts can lead to disappointment and a new year financial hangover.

Mike Haley, head of Consumer Protection at the Office of Fair Trading, says: "Christmas is a special time of the year but unfortunately it is also a period when many people feel under financial and emotional pressure. It's also an opportune time for would-be scammers to prey on people's vulnerability with bogus prize, gift and cash offers."

On the first day of Christmas my scammers gave to me

1) Never disclose bank details

Official-looking letters and emails asking for bank, credit card or personal details should be avoided at all costs. But if you do happen to fall victim to a hoax, the OFT advises people to call Consumer Direct on 08454 04 05 06 for advice.

2) Do not send money to strangers

'Companies' will ring up or send a letter, claiming that you have won a substantial prize, but to receive it you will need to send money first. Indeed, the OFT advises consumers to ask the opinion of neighbours, family and friends before sending any money to unsolicited people, although it could be said avoiding this altogether would be the best option.

3) When the APR is through the roof

Just when the festive finances are getting on top of you, a doorstep lender offers you a cash lifeline. But, the Mirror reports, such rip-off dealers are offering loans with up to a 183 per cent interest rate. Indeed, the newspaper even found a loan with a 365 per cent annual percentage rate (APR).

"These are targeted at people who can least afford it - those who would be unlikely to be able to get a loan from a bank," it adds.

4) Crazy credit card payments

Avoid unsolicited cheques from credit card companies which carry excessive charges. The Mirror notes that there can be a handling fee of 2.5 per cent of the amount borrowed and interest charges that total 27 per cent. Britons looking for the best credit card deals may want to shop around or research interest-free options before deciding which one to fund the festivities on.

5) Sky-high store cards

Spreading the cost of Christmas may sound like a good idea, but if you knew that one store card available comes with an interest rate of 222.7 per cent, would you still think this was the best way to do so, the Mirror asks?

Speaking to WalesOnline, Dino Bartholomew, director of an independent financial adviser firm, says: "If you do fall prey to temptation, ensure that you pay these off straight away to save large amounts in interest charges."

Common sense and debt management

6) Bingeing on borrowing

Although people may have to borrow they should do so responsibly, Mr Bartholomew advises. Bingeing on credit in the run-up to Christmas will only leave people with a financial burden once the celebrations are over.

"Despite falling interest rates, the outlook for the UK economy still remains grim in 2009," he warns.

7) Make a plan and stick to it

Rather than getting lured in by discount offers, people should decide how much they are going to spend on each person, Mr Bartholomew continues. Do not leave shopping until the very last minute to avoid panic buying and question whether a deal is really a good one.

8) Look out for the elderly

Older people are more vulnerable to pushy con artists. Gordon Lishman, director general of Age Concern, says that despite good intentions, millions of people find themselves victims to such individuals.

"The best defence is to know what to look out for and always remember that if it sounds too good to be true it almost certainly is," he advises.

9) Online safety matters

Britons avoiding the Christmas crowds by shopping online may want to heed the advice of the Telegraph. Using a credit card can ensure that you are adequately covered should something go wrong, while up-to-date antivirus software is another way individuals can protect themselves against cyber crime.

10) Leaving on good terms?

Checking the returns, terms and conditions as well as cancellation rights is a good habit that shoppers should get into, the Telegraph concludes. Being fully aware of what your rights are could take some of the stress off buying for loved ones.

Important Notice
This guide is intended for general information only and is not intended as, and does not constitute, any form of advice, recommendation or endorsement by us of any particular product(s) or services and you should rely on your own further research and professional advice in relation to your specific requirements and circumstances before purchasing any products or services. Use of this guide is subject to the Terms of Use of the KnowYourMoney site.