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Christmas has always been a target-rich environment for scammers. As frenzied shoppers drop their guard in pursuit of low prices, cyber-thieves move in to tempt and beguile. Now AI is helping them snare victims by the sleigh-load, allowing individuals to be targeted at scale and tricked into making bogus purchases or revealing financial details.
Generative AI’s ability to churn out sophisticated fakes adds persuasive power to holiday scams and gives fraudsters new ways to deceive unwitting shoppers, impersonate card holders, or hoard the most popular gifts and resell them at outrageous markups.
The good news is that consumers are on high alert for holiday deceptions. The bad news is that loss of trust could impact sales in retail’s crucial golden quarter. For victims of online fraud, left out of pocket or facing financial ruin when their identities are stolen, the pain is long-lasting.
Key Takeaways
- The final two months of the year are always high season for thieves and grifters eager to part distracted shoppers from their hard-earned money. But this year, things are worse.
- Scammers are using generative AI tools to cast their nets wider and entice more unwitting consumers with sophisticated online trickery.
- Phishing is still the tactic of choice, but AI makes faked emails even harder to detect.
- Meanwhile, deepfakes are helping criminals fool the latest verification methods, and AI-driven bot networks are cornering the market in popular items, driving up prices.
Holiday Scams 2024/2025: Tis the Season for Advanced Fakery
Figures from security vendor Darktrace show that Christmas-themed phishing attacks surged by more than 700% in the run-up to this year’s Black Friday sales extravaganza, while Visa reported an 85% leap in blocked transactions on Cyber Monday alone.
AI Is Behind the Leap in Holiday Cyber Scams
Fraudsters are taking advantage of the latest tools and using them to automate what used to be time-consuming tasks.
- GenAI’s ability to churn out new content in seconds means it can be used to continuously send, test, and tweak phishing emails to make them more convincing.
- It can also improve the hit rate of SMS campaigns.
- Instead of carpet bombing long lists of mobile numbers and hoping a few texts will land successfully, AI enables mass personalization mixed with branding language that makes messages seem more legit.
- Another trick is to use GenAI tools to incorporate real-time information from news outlets and social media.
- AI’s criminal productivity boost is also helping organized gangs sort through the huge volumes of hacked credit card information on the darkweb and quickly find numbers that haven’t yet been reported lost or stolen.
Credit data specialist Experian says the Thanksgiving to Boxing Day period has turned into the new festive season for identity fraud, where criminals take personal information culled from bogus transactions and use it to apply for financial products like credit cards and personal loans.
Figures released just ahead of Black Friday 2024 show that 83% of all fraud committed in the final quarter of the year of 2023 was identity fraud.
Paul Weathersby, Experian’s chief product officer for identity & fraud, said criminals are typically more active during the holiday months and use ‘a multichannel approach’ to trick people into sharing personal information through emails, texts, and phone calls.
How Scammers Use AI to Trick Unwary Shoppers
To get hold of personal information, crims are twisting GenAI’s ability to mimic people and brands to their own ends. If ChatGPT can manufacture plausible-sounding passages from the Bible, it can also make faked emails, ads and web pages more believable.
Darktrace says spoofed communications masquerading as trusted brands like Walmart, PayPal, and Amazon increased by 92% globally during the 2024 festive season. At peak shopping periods, the frequency of phishing emails exploded by 2,000%.
It’s not just traditional holiday shopping scams that are changing with the times; AI-generated deepfakes are being used to swindle shoppers and foil financial verification tools.
A 2024 analysis by McAfee suggests that 1 in 5 Americans were duped into buying fake products promoted by deep-faked celebrity doppelgangers last year.
Oddly, supposedly tech-savvy Millennial and Gen Z shoppers seem to have fared worse, with one in three victims of a deepfake grift falling between the ages of 18 and 34. That compares to just 5% of people aged 55 and over.
Wall Street giant J.P Morgan warns that deepfakes are being used to impersonate account holders and gain access to their information.
According to Regular Forensics, more than a third of companies selling products and services online have experienced deepfake voice fraud, and 29% have been hit by deepfake video fraud.
When e-commerce systems ask for selfie videos or images of an ID card for verification, GenAI can make a convincing (but fake) driver’s license or passport or spin-up a video that provides a credible-seeming stand-in for a ‘live’ human.
There’s also the issue of AI-orchestrated ‘Grinch bots.’ A 2024 analysis by Imperva says that up to 71% of UK shoppers may have been impacted this year by bot networks that ‘scalp’ online shopping sites. They scour the web to find the most desirable items, then buy them up quickly and resell them at inflated prices – up to 105% higher than originally listed.
Christmas isn’t the only high season for AI sleight of hand. When warm weather returns, figures from Booking.com show that vacation scams will skyrocket.
Last Summer, targeted phishing emails promising incredible all-inclusive package discounts and too-good-to-be-true last-minute deals jumped by 900%.
How to Avoid Holiday Scams in 2025
Retailers, banks, and security vendors are all working to find a solution to AI-powered shopping fraud. Public awareness campaigns are part of the fightback, but AI is playing a role too.
Visa has invested more than $500 million in AI fraud detection, while Mastercard said in May that it was using generative AI to double the speed of detection when someone tries to use a compromised card.
‘While fraudsters are increasingly turning to AI, so are we,” said Paul Fabara, Chief Risk and Client Services Officer at Visa. “It’s paying off. We continue to block more attempts at fraud.”
JPMorgan Chase is using an AI system it says can confidently validate payments and detect anomalous activity.
Police, meanwhile, are doing their bit. Action Fraud, the UK’s national reporting center for cybercrime, published a ‘12 frauds of Christmas’ list this year to help consumers spot dodgy emails, adverts, and online offers.
Techopedia has compiled some top tips for spotting and stopping Christmas holiday fraud:
- ?? Make Skepticism Your Default Mode. Never assume a phone call, email, text, or other communication is genuine, especially if the caller or sender is asking for personal information or making high-pressure demands.
- ?? Ask for Proof. If you receive an unexpected call from someone claiming to work for a given organization, ask for their name, then hang up and call back on the number listed on the company website. If the caller claims to be from a bank, use the phone number listed on the back of your debit or credit card.
- ?? Beware the Click Reflex. Don’t click a link or double-click an email or IM attachment if it hasn’t been sent from a known and trusted source.
- ?? Under-Share on Social Media. Giving away too much detail about yourself, your location, your job or your family on social media sites can hand fraudsters a gold mine of info that can be used in social engineering scams.
- ?? If an Offer Looks Too Good to Be True, It Probably Is. Be wary of any unsolicited communication promising easy money, big discounts or out-there career prospects.
- ?? Protect Online Accounts. Think seriously about moving to randomly-generated strong passwords, but at minimum, make sure your email account password is different from your online shopping accounts. Always enable 2-step verification (2SV).
- ?? Do Your Research. Before making any big purchase or transferring any significant sum of money online, be confident about the legitimacy of the company or platform. Read user reviews. Look for a listed business address and read the legal disclaimer.
The Bottom Line
The last few years haven’t been easy going for B2C. On the fourth anniversary of the first COVID Christmas, consumer-focused companies can pat themselves on the back for managing through a cascade of mini crises and macro pressures, from rising inflation to disrupted supply chains; and in the UK, an unprecedented in-store crime wave of shoplifting and staff abuse.
Throughout it all, retailers, banks, hotels, and airlines have become increasingly reliant on e-commerce to sell products and services. They now need to convince a wary, inflation-squeezed public that their apps, websites, chatbots, social media shops, push notifications, and emails haven’t been spoofed by advanced online fakery.
FAQs
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References
- The state of ecommerce trust in 2024 [Original Research] (Blog.trustedsite)
- Consumer trust continues to decline, survey finds | CX Dive (Customerexperiencedive)
- Holiday retail sales in the United States 2000-2024 | Statista (Statista)
- Fake adverts: ‘I died inside – I had fallen victim to a scam’ (Bbc)
- Phishing Attacks Surge Over 600% in the Buildup to Black Friday | Darktrace Blog (Darktrace)
- Visa Helps Holiday Shoppers Stay Secure, Blocking Nearly 85% More Suspected Fraud Globally This Cyber Monday Compared to Last Year1 | Visa (Usa.visa)
- AI Will Increase the Quantity — and Quality — of Phishing Scams (Hbr)
- Festive season Identity Fraud set to soar (Experianplc)
- ChatGPT writes Bible story about Jesus affirming trans identity | U.S. (Christianpost)
- McAfee’s 2024 Global Holiday Shopping Scams Study Highlights Growing Concerns Over AI-Powered Scams, Including Deepfakes, Impacting Holiday Shoppers | Business Wire (Businesswire)
- How to spot impersonations, scams and deepfakes | J.P. Morgan Private Bank U.S. (Privatebank.jpmorgan)
- One-Third of Businesses Hit by Voice and Video Deepfake Fraud (Regulaforensics)
- Imperva flags AI supercharging Grinch bots driving up cost of Christmas for online shoppers — Retail Technology Innovation Hub (Retailtechinnovationhub)
- Booking.com warns of up to 900% increase in travel scams (Bbc)
- Mastercard Accelerates Card Fraud Detection with Generative-AI Technology | Mastercard Newsroom (Newsroom.mastercard)
- AI Boosting Payments Efficiency & Cutting Fraud | J.P. Morgan (Jpmorgan)
- Make sure you have a #FraudFreeXmas: Action Fraud reveal 12 fraud types to look out for this Christmas | Action Fraud (Actionfraud.police)
- How is coronavirus affecting retailers in the run-up to Christmas? – Economics Observatory (Economicsobservatory)
- BRC Crime Survey 2024 (Brc.org)
- Global e-commerce share of retail sales 2027 | Statista (Statista)
