Holiday Frauds: How Criminals Exploit the Year’s Busiest Season
The holiday season is a period of celebration and heightened activity. It is also the time when fraud peaks. During Black Friday, Cyber Monday, and the winter holidays, online spending surges, staff capacity drops, and individuals are overwhelmed with communication. Fraudsters take advantage of this “holiday chaos,” and each year their techniques become more industrial, automated, and difficult to detect.
Why Fraud Spikes During the Holidays
The seasonal rise in fraud is not accidental. It reflects deliberate, coordinated campaigns that begin weeks before major sales events.
Increased Activity.
The holiday period brings a sharp rise in online shopping, high-value transactions, and a flood of emails, texts, and promotional messages. This noise makes it easier to hide malicious activity, including payment fraud and account takeover attempts.
Vulnerability and Distraction.
Businesses operate with reduced staff, including IT teams who take year-end leave. Employees are distracted by deadlines, family plans, and seasonal stress. Their guard drops. Social engineering succeeds.
Early Fraud Campaigns.
Attackers no longer wait for Black Friday. They begin preparing 10 to 14 days before by testing credential-stuffing scripts, automated checkout bots, and other malicious configurations. By the time peak sales begin, the infrastructure is already in place.
The Most Common Holiday Fraud Schemes
Holiday fraud today blends financial manipulation, automation, and AI-driven deception. The schemes below are the ones that surge most sharply during this period.
1. Account Takeover (ATO) and Credential Abuse
Account Takeover remains the fastest-growing fraud vector. Attackers use stolen usernames and passwords from other breaches to run large-scale credential-stuffing attacks. Once inside an account, they drain stored payment methods, loyalty points, and pre-loaded carts. Fraudsters strike hardest in the week before Black Friday, when accounts are full of value.
The downstream impact is severe. Disputes and chargebacks spike in the first quarter, long after the holiday season ends.
2. Phishing and Social Engineering Scams
Phishing thrives on urgency, and the holidays provide plenty of it.
Gift Card and Executive Impersonation (BEC).
Fraudsters impersonate senior executives via text or email and issue urgent requests for gift cards or wire transfers. In early 2024, nearly 38% of all BEC attacks involved gift cards.
Vendor Email Compromise (VEC).
Attackers pose as trusted suppliers and send altered invoices or “updated bank details.” Year-end payment cycles make these scams particularly effective.
Fake Delivery Notices.
With everyone expecting packages, messages claiming to be from Amazon, DHL, or FedEx appear legitimate. They contain malicious links that harvest credentials or install malware.
Out-of-Office Harvesting.
Attackers send mass mail hoping to trigger out-of-office replies. These replies reveal vacation dates, alternative contacts, and internal patterns. The information is later used in targeted social engineering.
3. Online Shopping and Payment Fraud
Holiday e-commerce provides ample cover for criminals.
Fake Online Stores.
Fraudulent sites offer high-end products at unrealistic prices. Some deliver low-quality goods; most deliver nothing.
Triangulation Fraud.
This complex scheme links three parties:
– A shopper who pays a fraudulent site
– A criminal who uses stolen credit cards to buy the real item
– A legitimate merchant who ships the product and suffers the chargeback
This single method caused an estimated $660 million in losses[1] in November 2022 alone.
Stolen Gift Cards.
Gift cards remain a preferred criminal currency. They move quickly, leave little trace, and are easy to monetize.
Overpayment Scams.
Fraudsters send a fake check for more than the order amount and request the difference back. When the check bounces, the refund is lost.
4. Post-Sale Disputes and Friendly Fraud
After the holidays, merchants face a wave of disputes.
Chargeback Abuse.
Customers may falsely claim non-delivery, defective products, or unauthorized charges. Friendly fraud now outpaces many conventional fraud methods.
Common Holiday Triggers:
– Delayed deliveries
– Forgotten late-night purchases
– Billing descriptors that customers do not recognize
– Slow refunds and busy customer service teams
With U.S. online sales expected to exceed $250 billion in the 2025 season, these disputes carry significant financial risk.
5. Other Seasonal Scams
The holidays invite many non-transactional scams.
Malicious Attachments: “Holiday_Schedule.pdf” or “Party_List.xls” carry malware.
Holiday Ad Scams: Fake advertising services target small businesses.
Charity Scams: Fraudsters exploit seasonal generosity.
Fake Business Awards: Vanity awards with submission or trophy fees circulate aggressively.
Holiday Fraud as an Industrial Ecosystem
Holiday fraud today is no longer scattered or opportunistic. It has evolved into a coordinated, industrialized ecosystem. Criminals buy and sell stolen data, automated attack scripts, and malicious configurations. They use generative AI to mimic human shopping patterns, bypass detection, and appear legitimate.
The scale of this activity forces businesses to rethink their defensive posture. Fraud prevention and cybersecurity must operate as a single, unified function.
The Broader Threats Online Businesses Face
Beyond the holiday surge, online businesses operate under constant pressure from sophisticated organised crime groups.
1. Account Takeover and Credential Abuse
Stolen credentials enable fraudulent purchases, theft of stored rewards, and resale of compromised accounts. ATO attempts against retailers have doubled year-over-year during peak windows. Once a customer is affected, four out of five will stop shopping with the business.
2. Chargeback and Friendly Fraud
Each $1 lost to fraud can cost up to $4.41 in total due to fees, operational time, and increased risk ratings. Chargebacks can reach $20–100 each, sometimes more.
3. Card Fraud, Fake Sites, and Triangulation
Criminals continue to exploit card-not-present vulnerabilities and set up fake retail ecosystems. Some rings, such as “BogusBazaar,” have stolen card details from over 850,000 people.
4. Supply Chain and Third-Party Weaknesses
A single breach at a fintech partner, API provider, or embedded finance platform can expose thousands of businesses at once.
5. Organized Retail Crime (ORC)
Stolen goods are channelled through online marketplaces, creating a secondary economy that funds broader illegal activity.
High-value categories include electronics, power tools, and pharmaceuticals.
How Businesses Can Protect Themselves
A modern defence requires layers. Technology, controls, training, and collaboration must reinforce one another.
1. Use Advanced Technology (AI/ML)
- ML-based anomaly detection
- Behavioral biometrics to spot unusual user interaction
- AI agents that reduce false positives
- Adaptive authentication based on risk scoring
2. Strengthen Payment and Transaction Security
- Liveness checks for card transactions
- Aligned billing descriptors
- Real-time transaction monitoring
- Clear and accessible refund and returns processes
3. Build Strong Internal Defences
- Tone at the top that values integrity
- Mandatory fraud awareness training
- Two-person verification for high-value transactions
- Independent confirmation of banking changes
- Robust internal controls and segregation of duties
4. Manage External and Ecosystem Risk
- Rigorous third-party due diligence
- Cybersecurity standards for all partners
- Information sharing with retailers and law enforcement
- Dedicated teams for ORC where relevant
Holiday fraud is no longer a seasonal inconvenience. It is a structured, scalable business for criminal groups. As the digital economy grows, so does the attack surface. The only effective response is a unified defence—one that pairs intelligent technology with disciplined governance and a vigilant workforce.
How Endurisk Advisory Can Help
Endurisk Advisory supports organisations in strengthening their fraud defences through practical, intelligence-led solutions. We help businesses assess their exposure through fraud risk assessments, design and implement internal controls and governance frameworks, and build organisational resilience through employee training on social engineering and fraud awareness. We also assist companies in developing AI-aligned fraud prevention strategies, ensuring their systems and policies remain effective against emerging threats such as automated attacks and generative-AI-enabled scams. Our approach is independent, research-driven, and tailored to the operational realities of each client.
Ready to take proactive fraud prevention measures? Contact us today!
[1] Holiday Shopping Threats Triangulation Fraud, FS-ISAC’s Triangulation Fraud Working Group Communications and Awareness Subgroup
