Kids believed that handling toads, especially their bumpy skin, would transfer warts to your hands.
Warts are caused by the human papillomavirus (HPV), not by toads. Toads have bumpy, warty-looking skin as a defensive feature, which likely led to the association. While toads do secrete toxins as a defence mechanism, these don't cause warts. You can safely handle toads; the real risk is the toxins irritating your skin or eyes if you touch your face.
Reception
Sources
- Mayo Clinic: Warts Causes PRIMARY
- Snopes: Toads and Warts REFERENCE
- Wikipedia: Wart REFERENCE