Holiday fraud is ramping up. So are banks' efforts to thwart it.

Customers who have come to expect deep discounts and sales during Black Friday and Cyber Monday face a significantly greater risk of fraud during this time of the year. Experts say the primary means banks and credit unions have for reducing this risk is education.

Between Thanksgiving and Cyber Monday last year, fraud attempts increased by 25% compared to the rest of the year, according to data from TransUnion. The data comes from TransUnion's fraud prevention product Truvalidate, which screens billions of transactions each year from more than 40,000 websites and apps.

The findings from TransUnion line up with how consumers report their own experiences. In a 2020 survey by Experian, one in four U.S. consumers said they had fallen for a fraud scheme during the holidays. Over the course of the year, three in four U.S. consumers report being targeted by at least one form of fraud, according to a survey AARP conducted last year.

Amplify, a credit union in Austin, Texas, has responded to this heightened risk by ramping up its consumer education, according to Kat Cuoco, Amplify's vice president of enterprise risk management and compliance.

"Our fraud department has partnered with our marketing area to push information to members so consumers can be aware of the trends we're seeing, and we really get their attention when it's something big," Cuoco said.

On its website, Amplify provides information to members about password security, loan forgiveness scams, charity scams and other seasonal fraud for consumers to identify and avoid.

The FBI also provides its own consumer guidance. According to the bureau, the two most prevalent kinds of holiday scams are nondelivery and nonpayment crimes. In a non-delivery scam, a buyer pays for goods or services they find online, but those items are never received. Conversely, a nonpayment scam involves goods or services being shipped, but the seller is never paid.

According to the latest report from the Internet Crime Complaint Center, nonpayment and nondelivery scams cost people more than $337 million in 2021. Credit card fraud, which also increases during the holidays, accounted for another $173 million in losses.

The FBI also warns consumers about auction fraud, where a product is misrepresented on an auction site, and gift card fraud, when a seller asks you to pay with a prepaid card. The bureau advises consumers to never wire money directly to a seller and to avoid paying for items with prepaid gift cards, and to opt for credit cards that provide fraud protection over debit cards, which do not.

Financial institutions do not need to stop at providing information to their customers. Amplify employees who take calls from members through the credit union's call center get a unique opportunity to identify fraud on members' behalf, and those employees cross-train to be better prepared to help, Cuoco said.

"We've done a really great job shadowing with our fraud department and some of our front line, so our phone center reps can sit in with the fraud department and see what they see," Cuoco said. "That way, when the rep gets a call about a unique situation, they know how to apply it. We have found huge prevention in losses that way."

These interactions help build trust with members such that, if they see a deal that might seem risky, they can trust the credit union to provide guidance.

"It's not just the information to give them the ability to avoid fraud, but it's also telling the member, 'Hey, if you want to talk to somebody who can be a subject matter expert for you, or just an ear, you have a way to get that.' "

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Well-intentioned people looking to provide guidance to consumers during the holiday season parrot the adage that "if a deal seems too good to be true, it probably is." But that messaging has a problem, according to Carl Kriebel, a cybersecurity shareholder at the accounting firm Schneider Downs.

"The issue is that the main holiday season shopping days — Black Friday and Cyber Monday — are built on this mentality," Kriebel said. "Somebody may know better when they see a 70-inch flat-screen on sale for $100 in March, but during the holiday season, deals like this can be the norm."

In other words, "consumers expect uncharacteristically large savings and deals," he said. Combine that with the typical stressors of the holiday season and a backdrop of heightened economic uncertainties, Kriebel said, and consumers feel even more pressure to stretch their dollar than in past holidays, while fraudsters are better equipped to exploit that impulse.

One of the best ways for financial institutions to help consumers combat fraud is to inform them, Kriebel said.

"More educated consumers are better positioned to avoid scams in general as they can sniff out an attempt to trick or deceive them by threat actors," Kriebel said. "To that extent, banks can seek to play an important role in helping consumers understand what to look out for across various different transaction types."