CU Interest in Fraud on the Rise

ARLINGTON, Va.-NAFCU dedicated its January 2005 Flash Report to the rising prevalence of fraud by measuring credit union interest in the phenomenon. Of the respondents to the Flash survey, 77% identified fraud as a major concern. The bulk of the credit unions, 82%, indicated that their credit unions increased employee training in fraud and fraud prevention over the past year. A full 95% responded that they have a specific person assigned to handle fraud related issues. Two-thirds (66%) of credit unions reported an increase in check fraud in 2004 and 63% said they experienced increases in plastic card fraud. Nearly half (48%), the Flash found, said they experienced increased identity theft in 2004 over the previous year. Plastic card fraud was the greatest concern among respondent credit unions at 40%, but check fraud followed closely behind at 37%. Another 19% said identity theft was their greatest concern. ACH/wire transfer fraud and Internet fraud trailed at 1.5% each. To counter the potential for fraud concerning cashier’s checks, almost 5% of credit unions call the issuing financial institution to verify the check. Twenty six percent call when the check is over a certain amount, which ranged between $500 and $20,000; the most common ceiling was $5,000. However, the majority of credit unions do not call to verify the check. Nine in 10 respondents said they have a close working relationship with local law enforcement to combat fraud. “While fraud remains a concern for most credit unions, steps are being taken to combat fraudulent activities,” the Flash stated.