How to Protect Members From Holiday Fraud: 2025 Trends and Tactics
’Tis the season for giving and for fraud. From AI-driven phishing to payment app scams, criminals are exploiting holiday distractions at unprecedented speed and scale.
Online shopping is surging this holiday season and digital payment fraud is a dangling anvil, ready to crush holiday spirits, steal dollars, and compromise identities.
Criminals are getting faster, smarter, and more psychologically manipulative—turning the most festive time of year into prime hunting season for stolen money and stolen identities.
You’re a Mean One, Mr. Grinch—Especially If You Phish.
Identity theft is becoming deeply psychological, and members and employees must be wary. This year, phishing continues to be a high fraud exposure and it’s at the top of the Naughty List.
The 12 Scams of Christmas
On the first day of Christmas, the fraudsters gave to me…
- AI-generated phishing messages: The free market of AI makes it easy for criminals to generate error-free phishing messages. Gone are the odd tone and grammatical errors that have long been the hallmark of phishing. Email, phone, and texting (in that order) remain the most common phishing channels.
- Payment app fraud: Venmo, PayPal, Zelle, Cash App, and other P2P payments surpassed $1 trillion in losses, creating major fraud exposure.
- Gift card requests: Posing as an employer fraudsters demand wire, ACH, or cryptocurrency payments, typically through a business email address.
- “Chip not working” at POS: An faulty chip reader combined with a card that has magnetic stripe fallback results in a less secure transaction. If fraud occurs on this type of transaction, the FI is liable for the remediation.
- Empty gift cards: In-store gift cards are purchased in good faith and then drained by bad actors.
- Fake or “non delivery” notifications: Alerts claim a package cannot be delivered unless the recipient (victim) verifies personal information.
- Non delivery scams: Buyer pays for goods that are never delivered – totally millions in losses every year.
- QR code scams: Fraudulent codes promote a deal or holiday special but link to a site that harvests personal information.
- Charity scams: Preying on the holiday spirit of generosity, fraudsters create false charities and collect donations.
- USPS blue box theft: In this old-fashioned fraud scheme, criminals steal blue box keys and then empty mailboxes of cash- or check- containing envelopes.
- Delayed use of stolen or falsified identity: Fraudsters play the long game of fraud, waiting till after the holidays to use stolen data, leaving a nearly untraceable trail of losses.
- Deepfakes and real-time social engineering: Hackers are deploying unnervingly realistic deepfakes to manipulate human error and/or empathy – in real time.
The Nice List: Keep identity, money, and data nice and secure
Tis’ the season to be extra wary and vigilant. As the fraudsters get more clever, stay protected with these practical steps:
- Unexpected contact: If you aren’t expecting a verification code or money request, don’t respond to it.
- Unusual transactions: POS transactions under $50 entered without a PIN should raise suspicion. Restrict payment apps (Venmo, PayPal, Cash App, Zelle, etc.) to friends and family only. Thoroughly and frequently authenticate accountholders.
- Urgent requests: A request for data or money with an urgent tone often causes the victim to override logic. Always pause before providing personal or business information, especially if the tone sounds urgent.
- Ultra-wary: Taking extra precautions during the holidays can strengthen year-round protection. Use color remote deposit capture, enable MFA for online banking, and encourage members to set up transaction alerts. Advise members to drop off cash, gift cards, and checks-containing parcels directly to the post office and to enroll in USPS Informed Delivery.
Stay Protected During the Holidays – and All Year Long
Reported fraud rose 25% since last year, and losses accrue at an astonishing pace during the holiday season.
Though it’s on our wish list, fraud is not going away this season or beyond. Review your liability coverage and ensure that it is adequate to stay protected beyond the holidays, all year long.
Fraud tactics are constantly evolving, so staying informed and protected is key.
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