Preventing Holiday Season Fraud: Protecting Customers from APP Scams

Alvin Lang
Dec 17, 2025 14:40

Learn how to safeguard customers from APP fraud during the holiday season, a peak time for scams affecting both traditional and crypto financial platforms.

The holiday season, while a time for celebration, also marks a peak period for cybercriminal activities. Online fraudsters exploit the surge in online shopping and the urgency of festive purchases, turning what should be a season of giving into one of taking. According to Chainalysis, the estimated losses to scams in 2025 could reach a staggering $442 billion.

Understanding APP Fraud

Authorized Push Payment (APP) fraud poses significant risks to both consumers and financial institutions. This type of fraud involves tricking victims into willingly transferring funds to fraudsters. The scam is particularly challenging to detect because the transactions appear legitimate, often routed through verified accounts. Traditional detection tools primarily focus on sender risk, missing the critical recipient risk, which allows fraudsters to evade detection until it’s too late.

Impact on Financial Institutions

APP fraud not only affects individuals but also places a substantial burden on financial institutions, including banks, real-time payment networks, and cryptocurrency exchanges. These entities face financial losses, reputational damage, and increased customer disputes. A significant portion of customers, about 67%, believe that their financial institutions should reimburse them for funds lost to scams, even when they authorized the transactions themselves.

Rising Threats in the Financial Sector

APP scams have emerged as the top threat to financial institutions. In 2024 alone, over $10 billion in cryptocurrencies were lost due to these scams, encompassing reimbursements and operational costs. As fraudsters become more sophisticated, the need for advanced detection and prevention strategies becomes imperative.

Proactive Measures for Protection

To combat the growing threat of APP fraud, financial institutions must adopt proactive measures that go beyond traditional identity checks and behavioral biometrics. By understanding the intricacies of these scams, institutions can better protect their customers and themselves during the vulnerable holiday season.

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