Credit unions continue to manage a multitude of threats and exposures. Front-line staff play a critical role in identifying and preventing potential threats, whether the fraudsters use “tried and true” methods or new approaches.
The following alerts and recommendations from CUNA Mutual Group highlight the importance of awareness and education in preventing credit unions and members from becoming victims.
Risk: Wire transfer frauds involving home equity lines of credit (HELOC) have been a problem since 2006, and the fraudsters are making a new round of aggressive attacks by mining public data and changing member profiles (e.g., phone numbers, and email and home addresses). A new twist is that the wires appear to be going to construction companies.
Risk: Fraudsters continue to victimize members through check scams such as the secret shopper, overpayment, and work-at-home scams. You’re trained to engage members presenting large-dollar checks for deposit or payment, which helps detect when members are being scammed.
Someone hires your member as a secret shopper to evaluate the effectiveness of a money transfer service. The member receives a phony check with instructions to deposit it in the credit union and withdraw most of the funds in cash. The fraudster instructs the member to use a specified money transfer service to send the funds to a foreign country.
Risk: The credit union receives “IRA (individual retirement account) rollover checks” ranging from $60,000 to more than $80,000 via overnight mail from new members.
The new members then withdraw the funds from different branches and request wire transfers to foreign countries prior to the checks being returned unpaid. It’s uncertain whether the members perpetrated the crime or are victims.
CUNA Mutual Group’s Credit Union Protection Resource Center allows policyholders to access a wide array of helpful online resources, including staff training modules, recent risk alerts, and loss control recommendations. For registration information, contact CUNA Mutual Group at email@example.com.
This article first appeared in Credit Union Front Line Newsletter, the monthly sales and service newsletter for branch staff and their managers. Subscribe now to the print edition or PDF version.