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CU System
HELOC Funds a Target For Wire Transfer Fraud
MADISON, Wis. (9/24/13)--Members sometimes call to ask for help transferring home equity line of credit (HELOC) funds to a checking account. Or they'll request assistance via e-mail or your online banking system's messaging system, sometimes to request wire transfers.
It's a perfectly normal occurrence--and that's what thieves count on, according to Credit Union Front Line Newsletter, which provides sales and service insights from the Credit Union National Association for branch staff and managers.
Scammers have learned to impersonate members on the phone and through other channels, building profiles through information they find in public databases or acquire by hacking into the member's computer. They can lift signatures from real estate documents available in public records, for use in fake faxed documents.
By the time they get in touch with you, they might already have your members' account numbers and passwords, or simply be fishing for them.
To combat this threat, consider these tips from Roger Nettie, a senior risk consultant at CUNA Mutual Group.
Thieves often use simple bait, impersonating a member who's a bit confused. They might present an urgent need for transferring HELOC funds to their checking account, then ask to execute a wire transfer of that money to another account.
They're counting on your ethic of helping members, which is exactly why some criminals prefer working with credit unions. But you can continue to provide excellent member service without compromising security, Nettie said in Frontline.
Watch for these red flags:
  • Members call to change the phone numbers or e-mail addresses on their accounts, and/or to reset a password. This could be the first step in perpetrating a HELOC wire fraud. The fraudster could be changing the contact information so that, later, the credit union will send confirmation requests to an e-mail or phone the fraudster controls. Flag these accounts so you can thoroughly examine future wire transfer requests made through remote channels.
  • Members employ a remote channel--phone, e-mail, fax, online banking messaging system--to request a wire transfer of funds previously transferred to the account from a HELOC.
  • You call a member to confirm a request and hear an unusual delay or clicking sound before the member answers. The scammer might have rerouted the member's regular phone number.
  • You receive a wire transfer request with a foreign bank destination.
  • You receive a funds transfer request from a member who has no history of funds transfers.
  • A member whose e-mail or phone number has changed recently requests a funds transfer.
It's important to know the circumstances under which HELOC fund transfers, wire transfers, and other transactions might indicate fraud.
Even requiring a member to sign a document in the presence of a notary public might not suffice, as scammers easily can duplicate notary seals.
Know whether your credit union has a standard procedure to follow should any of these red flags appear, and when to require a member to visit a branch.
If members ask why you're taking extra steps, don't hesitate to assure them your No. 1 priority is protecting their money from criminals.

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