Treasury Warns Shoppers As Holiday Cyber Scams Surge

(MENAFN- The Arabian Post)

Federal authorities in Washington have issued a fresh warning to consumers and financial institutions as cyber-enabled fraud intensifies during the year-end shopping season, highlighting a sharp rise in sophisticated scams powered by artificial intelligence and automation. The U. S. Department of the Treasury's Office of Cybersecurity and Critical Infrastructure Protection said the scale and complexity of digital fraud now pose systemic risks to household finances and payment networks, with losses running into tens of billions of dollars annually.

Treasury flags rising holiday cyber fraud risks as online shopping, digital payments and peer-to-peer transfers become embedded in everyday commerce. The advisory released on 15 December urges heightened vigilance from consumers, retailers, banks and technology platforms, noting that seasonal spending spikes are increasingly exploited by organised criminal networks operating across borders.

Officials said holiday periods consistently deliver higher volumes of phishing, fake delivery notifications, impersonation scams and fraudulent charity appeals. What has changed is the quality of deception. Scammers are deploying AI tools to clone voices, generate realistic emails and create convincing customer-service chats that mimic banks, retailers and government agencies. Automated systems now allow criminals to contact thousands of targets simultaneously, adjusting messages in real time to improve success rates.

Treasury officials warned that AI-driven impersonation has lowered the barrier to entry for fraud, enabling less technically skilled actors to launch complex schemes. Voice cloning has been used to mimic relatives or executives, pressuring victims into urgent payments. Deepfake videos and synthetic images are also emerging in investment and romance scams, blurring the line between genuine and fraudulent interactions.

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Financial institutions are facing parallel pressures. Payment providers report rising disputes, reimbursement claims and compliance costs as fraud volumes grow. The advisory notes that while banks have strengthened transaction monitoring and authentication, criminals rapidly adapt, shifting to platforms with weaker controls or exploiting social engineering to bypass safeguards altogether.

Retailers and logistics firms are also being targeted. Fake order confirmations, refund notices and delivery alerts remain among the most effective lures, particularly during peak shipping weeks. Consumers are often redirected to cloned websites designed to harvest login credentials or payment details. Treasury officials stressed that legitimate companies rarely request sensitive information through unsolicited messages, a distinction that fraudsters deliberately obscure.

The advisory places particular emphasis on behavioural manipulation. Rather than relying solely on malware, many scams exploit urgency, fear or emotional trust. Messages warning of account suspensions, missed deliveries or family emergencies are engineered to prompt quick action before victims can verify authenticity. AI systems now refine these tactics by analysing responses and tailoring follow-ups.

Beyond individual losses, the Treasury framed cyber fraud as a threat to critical financial infrastructure. Large-scale scams can strain payment systems, undermine confidence in digital commerce and impose costs that ripple across the economy. Smaller banks and credit unions face disproportionate impacts, as reimbursement obligations and fraud prevention investments weigh on balance sheets.

The office called on consumers to slow down transactions, verify unexpected requests through independent channels and enable multi-factor authentication wherever possible. Regular software updates and strong, unique passwords were highlighted as baseline protections, alongside scepticism towards unsolicited links and attachments. Families were encouraged to discuss common scam scenarios, particularly with older relatives who remain frequent targets.

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For institutions, the advisory underscored the need for information-sharing and coordinated defence. Fraud patterns evolve quickly, and early warnings can limit spread. Treasury officials urged closer collaboration between banks, retailers, telecom providers and technology firms to disrupt scam infrastructure, including the rapid takedown of fraudulent domains and accounts.

The growing role of artificial intelligence presents a dual challenge. While criminals are exploiting AI, financial institutions are increasingly deploying the same technologies to detect anomalies, analyse behaviour and flag high-risk transactions. Treasury officials said responsible use of AI can strengthen defences, but cautioned that over-reliance without human oversight may introduce new vulnerabilities.

Regulatory attention is also intensifying. The advisory aligns with broader federal efforts to strengthen cyber resilience across critical sectors, including finance, energy and communications. Officials signalled that expectations around risk management, consumer protection and incident reporting will continue to evolve as threats escalate.

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