Holiday Fraud Alert: Top 5 Trends to Watch This Season

The holiday season is upon us, bringing with it a surge of shopping, travel, and generosity. Unfortunately, it’s also a time when fraudsters sharpen their tools, exploiting our busy schedules and festive spirit to carry out their schemes. At NICE Actimize, we monitor these trends closely, equipping financial institutions (FIs) with the technology to protect consumers. But knowledge is just as critical as technology—understanding the threats is the first step to avoiding them.

Let’s explore the top scams this season and how both individuals and FIs can stay a step ahead.

The Temptation of Fake Deals

Unbelievably good deals on the latest gadgets or holiday must-haves flood inboxes and social media feeds during this time of year. They often lead to well-crafted but fake websites designed to steal payment information. Shoppers expecting an incredible bargain are left empty-handed.

Staying safe begins with caution: scrutinize URLs, avoid clicking on flashy ads, and stick to reputable retailers. For FIs, leveraging behavioral analytics to detect unusual purchase patterns can prevent fraudulent transactions, protecting customers before it’s too late.

The Trouble with Gift Cards

Gift cards, long a popular present, have also become a favored tool for fraud. Scammers might sell discounted cards that turn out to have no value or request payment in gift cards for false deals or urgent needs. Once the information is handed over, it’s nearly impossible to recover.

To avoid falling victim, purchase cards only from trusted retailers and never share gift card information. FIs can monitor for patterns linked to these scams, helping identify and mitigate suspicious activity.

Charity Scams Prey on Generosity

The season of giving inspires many to donate to worthy causes, but fraudsters know how to exploit goodwill. Fake charities or impersonations of well-known organizations emerge, seeking donations through high-pressure tactics. These scams are especially common in the lead-up to year-end holidays.

Consumers should research organizations before giving, using trusted platforms to verify legitimacy. Donating directly through official charity websites is always a safer option. Meanwhile, FIs can play a crucial role by using AI to detect unusual donation patterns, flagging potential risks to protect both donors and their funds.

Holiday Job Offers Gone Wrong

Seasonal employment opportunities are plentiful, but so are scams disguised as legitimate offers. Fraudsters lure job seekers with promises of easy money, often involving tasks like transferring funds or reshipping packages. These victims unknowingly become money mules, aiding in the laundering of stolen funds.

Job seekers should be wary of offers requiring them to handle money or use personal bank accounts. Thoroughly researching employers can prevent costly mistakes. For FIs, advanced technologies like entity risk scoring and mule detection are vital for identifying accounts tied to these schemes and safeguarding against legal and reputational harm.

Travel Deals and Booking Scams

The rush to book last-minute travel or respond to flight changes creates an opportunity for fraudsters. Fake travel deals and phishing emails disguised as urgent messages from airlines or booking agencies aim to extract personal or financial information.

Travelers should confirm details directly with airlines and avoid clicking on links from unfamiliar sources. FIs can analyze transaction patterns to detect and block payments to known fraudulent operators, protecting customers from falling into these traps.

Protecting the Holiday Spirit

Fraudsters count on the distractions and goodwill of the holiday season to execute their schemes. But vigilance, combined with advanced fraud prevention technology, can make all the difference. FIs are at the forefront, protecting consumers through AI-driven insights and real-time detection. Consumers, too, have a role to play by staying informed and cautious. During this holiday season, let’s work together to outsmart fraudsters and keep the focus on what truly matters: celebrating, connecting, and giving with peace of mind.

Protect customers this holiday season with IFM for Enterprise and Xceed, the solution tailormade for mid-market and small banks, and credit unions.