Credit Union Fraud

Fraud Fighter Helps Credit Union Industry Fight Counterfeit Fraud

The Credit Union Industry needs to protect itself against counterfeit documents and react quickly to new threats as criminals continue to become more creative and efficient in their use of technology to commit fraud.

Credit Union Vulnerabilities

Financial fraud includes counterfeit currency, counterfeit money orders, cashiers checks and fraudulent or stolen credit cards - all of which affect the bottom line in an industry that is already struggling to recover from a rough economy.

Fake identification documents are used by fraudsters to open deposit accounts used to launder illicit funds, and to access funds in other people’s accounts. Immediate ID verification is necessary to stop theft. Credit unions also take deposits, merchant deposits, offer safety deposit boxes and must immediately authenticate the ID being presented at the time of the transaction.

In 2008 alone, Javelin and Associates reported that existing account fraud totaled more than $31 billion. Such losses make it hard for the financial industry to increase their profits.

Credit Unions derive much of their revenues by issuing credit. Credit cards, home loans, equity lines of credit, business loans, student loans - this aspect of the operation is vital. It is also the leading area of fraud within the industry. Identity fraud and its rise left unchecked can strongly affect the profitability of the industry as a whole.

Regulatory Compliance when Issuing Credit

Because Credit Unions issue credit, they must comply with complex regulatory requirements to validate whom they conduct such credit transactions with by immediately verifying the authenticity of the ID being presented. Regulatory examples include the Fair Credit Act, the “Red Flag Rule”, mandates associated with the Free and Accurate Credit Trade Act, the Bank Secrecy Act and the and Customer Identification Program required of all financial institutions.These combined legislative directives stipulate that issuers of credit must proactively involve themselves in the fight against identity theft by creating procedures, documented with step–by–step instructions, for how to validate ID documents of any individual applying for and being issued credit, and to maintain records of the identification for years after the event.

Stop financial crime and optimize regulatory compliance

Fraud Fighter™ enables Credit Unions to immediately verify the authenticity of identification to stop crime before it can occur, We recommend and implement proven solutions designed to prevent fraud related theft with easy to use, inexpensive and reliable protection controls.