MADISON, Wis. — CUNA Mutual is warning credit unions about acostly new attack by fraudsters on members with home equity linesof credit.

The sophisticated schemers already have struck at least 18credit unions, which reported losses or fraud attempts totalingmore than $6.5 million, with more losses expected, CUNA Mutualsaid.

Gary Pate, the company's director of insurance compliance andrisk management, said the criminals target members with large HELOCloans, typically sending the credit union a fax or e-mailrequesting a funds/wire transfer.

The requests are frequently for more than $100,000. They callfor funds to be transferred to banks in the United States, Chinaand Japan to accounts with the words “Title” or “Construction” inthe account name, Pate said.

Even credit unions with strong security in place have beenduped, including instances where staffers made call-backs to asecure telephone number. The thieves apparently had madearrangements with telephone providers to have calls to thosenumbers forwarded to their phones, CUNA Mutual said.

“What's making these scams even more insidious is that thecredit union's caller ID indicates the call is going to themember's number of record. Additionally, the fraudsters havedetailed member information, which is enabling them to answeradditional challenge questions from credit union staff,” Patesaid.

CUNA Mutual said it is helping the FBI and Secret Service withtheir investigation.

The company said it also sent its bond policyholder creditunions a risk alert on Jan. 3, advising them of theirresponsibilities and offers these recommendations:

- Establish a password system for members prior to acceptingfunds transfer requests by telephone, fax or mail. Have a writtenagreement with the member for the use of these passwords. CUNAMutual said credit unions are allowed to pass on liabilities to themember for any negligent use of their funds transfer password.

- If there is any doubt as to authenticity of the funds transferrequest, credit unions are reminded they do not have to perform awire transfer.

- Beware of large requests for wire transfers that draw againsta HELOC, particularly HELOCs that have large available balances andlittle previous activity.

- Limit the amount of wire transfer that can be completed by acall center employee. Managers should approve all wire-transferrequests.

- Record conversations during the call-back and compare it topreviously recorded conversations.

- Listen to the caller. Does he or she have an accent that isinconsistent to your membership?

- Perform an additional verification to the member's work and/orcellular telephone number.

- Additionally, if the credit union has the information, send ane-mail to the member at home and/or work.

Credit union policyholders that have experienced a loss wereencouraged to contact CUNA Mutual's Credit Union ProtectionResponse Center at 1-800-637-2676.