The online channel is a critical service tool for credit unions. The ability to provide convenient services anywhere and from any device is essential to a credit union’s member experience. However, online access provides fraudsters with a key channel to target members and your credit union quickly and effectively. It is also one with growing obscurity that challenges credit unions’ ability to ensure they properly authenticate and verify members and potential members.
Data breaches have fueled new authentication challenges with the main goal of identity theft. While technology security continues to evolve, fraudsters continue to access Social Security numbers and other personally identifiable information (PII) such as names, addresses, and birth dates from these breaches compounding the problem.
Stolen PII has significantly added to the number of identity theft-related fraud losses reported. Fraudsters continue to impersonate members to carry out fraudulent transactions. Here are some common examples to watch for:
What can you do to minimize risks from these growing schemes? Here are a few tips for member service representatives and front-line credit union staff to help spot potential fraudulent attempts:
Member authentication will always be a challenge for credit unions as fraudsters learn to exploit weak authentication methods. The online channel will continue to be an important connection to your members, but it will run the risk of providing a cloak of anonymity to fraudsters. In the end, the best defense are your employees and ensuring front-line staff are alert and cautious when opening accounts, processing loan applications, and handling online transactions. Because we can all agree that we always want to know who is at the door.
CUNA Mutual Group’s Protection Resource Center allows policyholders to access online resources, including training modules, RISK Alerts, and loss control recommendations. For more information on how to manage risk, contact CUNA Mutual Group at firstname.lastname@example.org.