The growing fraud threat facing UK businesses this festive season

The festive season is traditionally one of the busiest periods of the year, but for UK businesses it has become one of the most challenging for managing fraud. New Experian research indicates that fraudulent activity continues to rise ahead of and during the festive months, as criminals look to take advantage of increased spending, faster decision-making and stretched operational capacity.

New analysis from Experian data reveals a continued rise in fraudulent behaviour, including a 9.2 per cent increase in third-party identity fraud over the past three years and a significant shift towards synthetic and AI-enabled identities, which now account for 42 per cent of all identity fraud cases. There has also been a 53 per cent rise in fraudulent savings account applications.

What this shows is that the landscape heading into the festive months is more complex than ever, and businesses will need to respond accordingly.

A rapidly changing landscape

Experian continues to see identity fraud becoming more sophisticated. Recent patterns point to a growing reliance on manipulated documents, inconsistent digital submissions and older forms of identification, all of which are used to reinforce synthetic profiles with fragments of genuine data. As a result, these applications appear more credible during onboarding, making them harder for organisations to identify through traditional checks.

In November, Experian released a new report with Cifas, looking at the major fraud trends businesses face in 2025 and how they can protect their customers.  Cifas reporting reflects a similar trend, with identity fraud now representing a large share of cases recorded to the National Fraud Database. Much of this activity continues to originate online, highlighting criminals’ increasing reliance on digital channels to submit falsified or altered information.

The rise of AI-enabled fraud techniques

Generative AI is playing a central role in supporting this shift. Deepfake documents, synthetic voice calls and AI-generated imagery are becoming more widely accessible, allowing criminals to create highly convincing identity assets at speed.

This aligns with the broader rise in synthetic identity fraud, which now accounts for 42 per cent of identity fraud cases. Some criminals go as far as building full digital footprints around these synthetic profiles, making them appear increasingly legitimate. Savings accounts have become a particular target, with a 53 per cent rise in fraudulent applications supported by AI-produced materials that mimic the behaviour and documentation of genuine customers.

Seasonal pressures heighten exposure

The festive period amplifies these challenges. Higher transaction volumes, shorter decision windows and increased customer engagement with delivery and refund communications create conditions that fraudsters can quickly exploit. Facility takeover fraud has also continued to rise, often stemming from compromised credentials and phishing attempts that match typical customer behaviour during the season.

A broader view of evolving risk

This pattern is not only limited to financial services. Telecoms providers have seen sharp increases in account takeover attempts, supported by a significant rise in SIM swap activity. Retailers continue to face high levels of refund abuse, chargebacks and fraudulent high-value purchases linked to compromised or synthetic identities.

Fraud tactics increasingly move across industries, with criminals adapting the same methods to suit different onboarding journeys and customer interactions. This cross-sector spread is particularly important to understand as the festive period approaches, when activity spikes across retail, delivery, telecoms and financial services all at once.

Preparing for the months ahead

The next few months will be critical for organisations aiming to manage rising fraud risk. Strengthening multi-layered identity checks, building out behavioural analysis and reinforcing authentication processes can help distinguish genuine customers from increasingly sophisticated fraudulent profiles.

By reinforcing systems and maintaining vigilance across operations and taking a multi-layered approach incorporating biometric and behavioural technology organisations can better protect customers and minimise risk during one of the busiest and most demanding periods of the year.