Published on: December 19, 2024
Incidents of holiday scams increase every year, with reported financial losses continuing to surpass figures from previous years. In 2024, global information company TransUnion reported a significant spike in global fraudulent activity as early as November 28, which coincides with Thanksgiving in the US and marks the start of the holiday shopping season worldwide.
We at SafetyDetectives are committed to delivering valuable cybersecurity and privacy knowledge. So, we explored the evolution, tactics, and impact of Christmas scams to offer our readers actionable advice to avoid falling victim to fraud this holiday season.
Evolution: From Direct Mail to AI-Driven Fraud
Modern scams became truly widespread starting in the 1980s, when fraudsters would use direct or physical mail to solicit donations for nonexistent charities. This boom could be linked to the first emergence of modern advertising in the 1970s when bold graphics and shorter selling points started replacing traditional ads that exhaustively listed product features and functions.
With consumers newly conditioned to short-format information sharing, it likely became easier to manipulate targets into contributing to fake fundraising campaigns without extensive investigation into the legitimacy of solicitors.
Since then, modes of fraud continued to evolve alongside technological innovations. Scammers found ways to leverage whichever space or platform is most popular.
Below is a detailed breakdown of the modes of scams that emerged throughout the years:
Tactics and Types of Christmas Scams
Different types of scams are present year-round, but the incidents typically increase during the holidays when people may be more susceptible to social engineering. The fraud prevention company SEON reported that Christmas Day recorded the “highest overall level of fraud activity” in 2023, while the “sharpest rise in fraud” was noted a week before Christmas.
Here are the types of scams that are historically most prevalent during the Christmas season:
Psychological Triggers Exploited
The holiday season sees a surge in scams. In 2023, the AARP reported that 80% of adult consumers in the US have experienced holiday-themed fraudulent activity. A year later, the figure has risen to 82%.
The increase in online shopping during this period, coupled with psychological triggers linked to the season, makes individuals more vulnerable. Below are the most common tactics employed during this time:
- Emotional Manipulation: Scammers often leverage the season’s tradition of giving, exploiting victims’ generosity by soliciting donations for nonexistent charities or relief drives.
- Appeal to Sympathy: Stories that tug on people’s heartstrings (e.g., families in shelters, children in orphanages) are particularly used to inspire emotional and impulsive decision-making.
- Authority and Trust: In some cases, scammers would pretend to be representatives from legitimate and well-known charities to lure people into making fraudulent donations.
- Urgency and Scarcity: Limited-time offers and “too good to be true” holiday deals are common high-pressure tactics, capitalizing on buyers’ fear of missing out on bargains amid gift shopping.
- Social Proof: Doctored testimonials of donations or purchases may trick individuals into spending their money without proactively and extensively verifying the legitimacy of the organization.
By staying vigilant of these psychological triggers, people can avoid falling victim to fraudsters’ tactics. It’s important to maintain skepticism: take time to research individuals or organizations that approach you for donations, corroborate stories and claims, and refrain from giving your payment information to unverified entities.
Targeted Demographics
Holiday scammers will typically exploit the pressure of last-minute shopping to victimize people. In 2023, a Norton study found that 1 in 5 adults would provide their personal information or click questionable links for a chance to redeem a desired item at a bargain.
In such cases, groups with more active online shopping habits are more vulnerable. For instance, nearly 3 out of 10 Gen Zers have admitted being willing to compromise personally identifiable information to acquire rare gadgets or gaming accessories. Fraudsters have caught up to this fact, as “flash sale” scams have increased by 450% on platforms frequented by young adults in 2023.
Seniors are equally prone to being targeted. They are often easily victimized by phishing emails or texts alerting them to supposed issues with their online shopping orders. Moreover, 42% confessed to being pressured into impulsive purchases by time-sensitive deals and discounts.
Below is a breakdown of the most commonly targeted demographic groups and the characteristics that make them more vulnerable:
Notably, seniors may suffer greater financial losses per incident than younger groups since younger adults are reportedly more inclined to report fraud. Moreover, phishing scams have the potential for higher losses than online shopping scams, as the former typically compromises the victims’ personal and financial data.
Financial Impact Across the Globe
A global Norton survey found that victims lost an average of US$1,500 each to fraudulent activities over the holiday in 2022. Several other countries have reported significant losses from Christmas scams:
- United States: A study conducted by McAfee revealed that 33% of consumers have been victimized by holiday scams. Of that group, over half have lost money, with 10% losing over US$1,000.
- United Kingdom: The National Cyber Security Centre (NCSC) reported that victims lost around £11.5 million (US$14.51 million) between Black Friday and the Christmas shopping season in 2023 — an 8.5% increase from 2022.
- New Zealand: 25% of adults were reportedly targeted in holiday scams in the previous year. Of those individuals, 83% suffered losses of up to NZ$50,000 (around US$28,800), while NZ$1356 (US$780) was the average loss.
People in high-income countries are typically more likely to encounter online shopping scams because of the higher adoption of digital technology and stronger online presence. On the other hand, SMS and investment scams remain common in developing countries, alongside some online shopping scams.
Psychological Impact on Victims
Beyond financial losses, fraudulent activities often result in negative emotional and mental impacts on victims. In April 2024, the UK Parliament POST highlighted how scams can cause isolation, loss of trust, behavioral changes, loneliness, and depressive tendencies. Victims would typically suffer from sleep disorders, anxiety, shame, guilt, anger, or trauma.
Dr. Stacey Wood, psychology professor and author of the book “A Fresh Look at Fraud: Theoretical and Applied Perspectives,” said in 2022 that victims of scams often end up doubting themselves and their decision-making capabilities, whereas victims of other crimes don’t usually blame themselves for an offender’s action.
With generative AI being exploited to facilitate more scams, people are becoming even more anxious. In the US, 60% of adults have reported being worried about deepfakes of celebrities being used in fake endorsements. Over 20% of adults (and around 33% of individuals between 18 and 34 years old) have reported being victimized by such deceptions.
Remember to observe online shopping safety practices to prevent falling victim to fraudulent listings, endorsements, or deals.
Other Christmas Scams to Look Out For
To help you stay vigilant, we listed below other common scams observed during the past Christmas seasons:
Staying Safe During the Holidays
Scammers’ practices have noticeably grown in complexity and sophistication over the years. As digital technology continues to advance, so do fraud tactics. As such, remaining vigilant during the season becomes more imperative. Here are some tips to keep in mind:
- Avoid clicking on dubious advertisements on social media or other unfamiliar e-commerce sites.
- Avoid impulse purchases to reduce the chances of getting manipulated by “flash sale” scams.
- Never click on email or SMS links from unverified senders.
- Never provide personal or sensitive information to suspicious sites, callers, or online forms.
- Review the privacy policy of mobile apps before downloading or using them.
- Conduct thorough research on organizations or platforms soliciting donations, especially if cryptocurrency is involved.
We also wish to highlight the importance of victim support. Given the potentially enormous financial and psychosocial fallout of falling victim to Christmas scams, it’s vital for governments and organizations to promote mental health counseling for fraud victims. Similarly, we encourage victims suffering from trauma, anxiety, or depression to seek professional help as soon as possible.