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Secret shopper schemes on the increase

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WASHINGTON (1/21/10)--Credit unions should warn their members there's been an increase in employment schemes pertaining to mystery/secret shopper positions, and some are asking for financial account information so the salary can be deposited in their account. The Internet Crime Complaint Center (IC3) said Wednesday fraudsters have learned that many retail and service corporations--including credit unions--hire evaluators to perform secret or random checks on their service or their competitors, and the fraudsters are capitalizing on this. Victims receive e-mail or U.S. mail urging them to apply as a mystery shopper. Applicants are asked to send a resume and are subject to a background check before being hired. The fraudster sends the shoppers a check with instructions to shop at a specific retailer for a specific length of time and spend a specific amount on the store's merchandise. The shopper is to note the environment, color, payment procedures, gift items and shopping/carrier bags, and report back to the employer. The second trip evaluates the ease and accuracy of wiring money from the retail location. The money is included in a check received by the victim shopper. The remaining balance is the employee's pay for the assignment. After the merchandise is purchased and the money wired, the shopper learns the check is counterfeit, and the shopper is responsible for the money lost and fees incurred. In other versions, applicants are requested to provide bank account information to have money directly deposited into their account. This gives the fraudster access to the victim's accounts and money, making the victim an identity theft victim. The e-mails also have a pop-up that cannot be easily closed. The user clicks on the pop-up to purchase the software and must fill out a form that collects payment information. The user is charged for bogus software. Sometime malicious codes are installed on the computer. For tips to give members about avoiding becoming a victim, use the link.

Aftershock adds to Haitis woes CUs donate more

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MADISON, Wis., and WASHINGTON (1/21/10)--An aftershock that measured 6.1 magnitude rattled Haiti Wednesday morning, adding to the challenges of getting relief to more than three million people, including members of the country's 175 credit unions affected by the Jan. 12 earthquake. Credit unions around the world and their affiliated organizations and service providers have rallied to contribute to the Worldwide Foundation for Credit Unions' credit union disaster relief fund to assist the 404,090 credit union members in Haiti. In the U.S., the contributions are funneled through the National Credit Union Foundation's (NCUF) CUAid disaster fund via Combined contributions from the movement continued to climb Wednesday to $287,121, said Valerie Breunig, executive director of the Worldwide Foundation for Credit Unions, the charitable arm of the World Council of Credit Unions (WOCCU). Of that amount, $161,031 was collected through, said Jill Stevenson of NCUF's marketing and communications department. Of the funds collected through CUAid, 100% will go to credit unions and their employees, volunteers and members affected by the disaster. Those contributions are also tax-deductible. Breunig noted Wednesday she saw contributions from several credit unions and vendors such as Callahan's. National leagues from Canada, Australia and the Caribbean are coordinating fundraising campaigns in their countries as well. WOCCU did not provide a live dispatch Wednesday from its 16-person staff based in Haiti for its three-year project that began last July. WOCCU had received daily dispatches from the team leader. Communications are sporadic, and WOCCU's disaster relief team had arrived Tuesday with supplies to disburse. The statistics in Haiti are staggering. Three million Haitians--one-third of the country's population--were still needing food, water, shelter and medical assistance a week after the earthquake. At least 72,000 people were confirmed dead, and the toll was climbing. "This devastating earthquake has left the people of Haiti in dire need," said Rudy Hanley, president/CEO of SchoolsFirst FCU, Santa Ana, Calif., on announcing that the credit union had made a $25,000 donation to assist with relief efforts via NCUF's CUAid fund. Charlotte Metro FCU is donating $10,000 because, said President/CEO Bob Bruns, "The credit union philosophy is based on people helping people. And this is a time when the people of Charlotte Metro have an opportunity to reach out to the people affected by this terrible disaster." The League of Southeastern Credit Unions' Foundation, which serves Florida and Alabama credit unions, donated $10,000 toward the recovery, saying there are 350,000 Haitians living in the Southeast U.S. The need for credit unions and their members to take the lead in helping Haiti through this tragedy is imperative, said the league. "The pictures and stories coming out of the country are heartbreaking. These donations are small steps in helping the country recover and keep the flow of supplies strong," said LSCU President/CEO Patrick LaPine. Pennsylvania Credit Union Association and its service subsidiary, Pacul Services Inc., and the Pennsylvania Credit Union Foundation (PCUF) announced they had contributed a combined $4,000 (Life is a Highway Jan. 20). Joe Wambach, executive director of the PCUF, remained in close contact with WOCCU officials during the weekend. Wambach has experience working with Care International in Haiti for several years in the past. He helped provide guidance about distributing funds related to WOCCU's three-step recovery program. No stranger to adversity caused by nature, the Louisiana Credit Union League encouraged its member credit unions to "answer this international call of action" in its newsletter (eNews Jan. 20). "As evidenced during Hurricanes Katrina and Rita in 2005, this type of immediate, timely, and generous response is a natural effect of the credit union philosophy," said the league. "Credit unions around the world provided immediate support in our time of need and contributed to our rebuilding efforts. Now, we encourage you to give back to those who seek the same assistance as we once did." To support Haiti's credit unions and members through the international credit union disaster fund, make payments, via check, credit card or wire to: Worldwide Foundation for Credit Unions Inc., 5710 Mineral Point Road, Madison, WI 53705, USA. Donations also can be made online with a credit card at For wire transfer information, contact Valerie Breunig, Worldwide Foundation for Credit Unions at 608-395-2055 or via e-mail Please indicate the donation is designated for the Haiti Disaster Relief Fund. U.S. credit unions also can support WOCCU's relief efforts by donating through the NCUF at

GAC promo features hot new Web technology

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WASHINGTON (1/21/10)--Credit unions thinking they notice something different about the latest video message from the Credit Union National Association (CUNA) on the Governmental Affairs Conference (GAC) are correct. The message--in which CUNA President/CEO Dan Mica springs to life right on CUNA’s Web page--features technology from CUNA Strategic Services’ newest strategic alliance partner, SEMPartners Inc. The Tennessee-based SEMPartners has developed a proprietary product called CU-VO (Credit Union Video Overlay), which super-imposes transparent video over existing websites. On the GAC message, for example, it allows Dan Mica to appear right on CUNA’s Web page rather than through a video player. “When I first saw the CU-VO technology, I was struck by the way it commands attention, provides a personal connection, and allows for a stronger call to action,” said Mica. SEMPartners says the same qualities will appeal to credit unions using technology that the company points out will not interfere at all with a credit union’s core processing system and or even reside on its Web servers, making implementation quick and easy. There are four service offerings a credit union can use that allow credit unions to choose from a library of pre-recorded messages, submit a customized script, record their own video messages, or customize a package of services, such as coordinated video with auto dealers or local TV/radio websites. To view Dan Mica’s GAC message, use the link.

New Brunswick report outlines causes of 40M bailout

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NEW BRUNSWICK, Canada (1/21/10)--The near collapse of Caisse Populaire de Shippagan--a Canadian credit union--was due to a string of failures, ranging from shoddy accounting to mismanagement and the government’s failure to ensure adequate supervision of a credit union, according to an investigation by New Brunswick’s auditor general. In 2007, a series of events culminated in requiring a $40 million bailout by the Liberal government in power at the time ( Jan. 19). Mike Ferguson issued a 54-page report Tuesday that identified failures in the credit union’s chain of command--and the New Brunswick province’s regulatory regime that allowed the credit union to fudge its financial data, and inflate the salaries of some senior management. However, the report also indicates some of the blame should accrue to New Brunswick’s former Conservative government for failing to ensure adequate regulation and supervision of the credit union. Among the short-comings the report found: there was only a part-time superintendent of credit unions who had been directed to focus on other priorities; and the New Brunswick Credit Union Stabilization Board--the regulatory board at the time--had inadequate powers to act, once it became aware of the of the credit union’s problems. If the government had taken action more quickly, “the total loss to New Brunswick taxpayers would probably have been about half what it eventually was,” Ferguson wrote.

Attorneys Heartland-Visa settlement has weaknesses

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HOUSTON, Texas (1/21/10)--Credit unions and banks that issued Visa payment cards compromised by the Heartland Payment Systems data breach, the largest in history, should carefully review the proposed settlement between Heartland and Visa, say three attorneys in the case. They filed a complaint Tuesday against Heartland's acquiring banks--KeyBank and Heartland Bank--in a Houston federal court that alleges they share responsibility for damages caused by the Heartland data breach. The attorneys, appointed by the court as interim co-lead counsels representing the proposed class of Visa issuers against Heartland in the pending class action lawsuit in Houston, are Mike Caddell of Caddell & Chapman, Richard Coffman of the Coffman Law Firm and Joe Sauder of Chimicles & Tikellis. They say the proposed settlement has four weaknesses:
* It may offer little compensation to payment card issuers; * It gives credit unions and banks little time to decide whether to participate; * It releases Heartland and other parties from liability; and * It is being touted for reasons that "are not entirely accurate."
Credit unions and banks received notice of the proposed settlement on Jan. 14 and have until Jan. 29--roughly 15 days--to decide whether to participate in the settlement, which "is not as generous as Heartland and Visa want you to believe," the attorneys said in a press release. "There were over 86 million Visa payment cards compromised by the data breach," said Caddell. "Once a financial institution factors in the costs it incurred to cancel and reissue the payment cards and the unauthorized charges it was forced to absorb, its share of the settlement most likely will be pennies on the dollar," he added. The settlement releases KeyBank and Heartland Bank from potential liability for breach damages "although they contributed little to the settlement," said Coffman. Most of the settlement funds are provided by Heartland. The two banks have more than $98 billion in assets combined that could be tapped as "additional sources of money to compensate the issuers for their damages," Coffman said. Sauder said that in Visa's informational webinars about the settlement, issuers were told the settlement is similar to that of the TJX Cos. data breach settlement, where roughly 97% of the financial institutions elected to participate. But the TJX settlement occurred late in the case at a "very different stage in the litigation," Sauder said. The court had issued opinions denying the issuers' motion for class certification and narrowing their legal claims, which meant "there was no viable alternative for the issuers but to accept the settlement or file individual lawsuits," Sauder said.The TJX case produced more than 500,000 pages of documents. In the Heartland case, "it is early in the case and there has been no formal discovery," and the facts of the cases are different. "In our view, the proposed Visa settlement clearly is designed to circumvent the safeguards inherent in the judicial process," Sauder said. In the end, Caddell said, each financial institution must perform its own cost/benefit analysis to determine whether to accept or reject the settlement. "While we intend to continue to vigorously pursue our cases against Heartland and its acquiring banks to maximize the recovery for financial institutions, litigation is uncertain at best, and there are risks associated with all cases," Caddell said. The three interim co-lead counsels will conduct conference calls for financial institutions on Jan. 22 at 3 p.m. EST, Jan. 25 at 3 p.m. EST, and Jan. 26 at 10 a.m. EST. For more information, use the links.

CUs learn the value of media coverage

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MADISON, Wis. (1/21/10)--Credit unions nationwide are learning the value of media coverage in promoting their initiatives and accomplishments to the public. In a column about consumers obtaining car loans in an environment of tight credit, Susan Tompor, a columnist forThe Detroit Free Press, wrote about the advantages of credit unions. The article was picked up by 11 other media outlets nationwide. “For much of last year, credit unions became one port in the storm for many borrowers,” she wrote. “David Adams, president/CEO of the Michigan Credit Union League, said new-vehicle loans were up 36% for the fiscal year through Sept. 30, 2009, at Michigan credit unions,” Tompor added. “Nationwide, new-vehicle loans at credit unions were down 4.2%, he said.” Tompor also quoted Adams about the success of the credit unions’ “Invest in America” program with auto dealers, and Michelle Stocker, vice president of lending for Michigan Schools and Government CU, Clinton Township, Mich., about low credit union rates for new- and used-car loans. In Ohio, the Ohio Credit Union League sent out press releases with consumer information and statistics about the state’s credit unions. The media efforts have, so far, generated articles in two state newspapers, and segments on two television stations and one radio station (e-Lumination Jan. 13). In New Jersey, a Nintendo Wii charity tournament that raised money for Cure Kids Cancer and Children’s Miracle Network--sponsored in part by the New Jersey Credit Union League--garnered mention in the Sentinel, which serves South Brunswick and North Brunswick, N.J. Also, an article titled, “Screw the Bank? By All Means,” distributed by Minyanville Publishing and Multimedia LLC and picked up by (Jan. 20) takes up the Huffington Post’s Move Your Money campaign and discusses how consumers can move their money from a bank to a credit union. The article also directs readers searching for a credit union to the Credit Union National Association’s Credit Union Locator.

CU System briefs (01/20/2010)

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* BOULDER, Colo. (1/21/10)--The $312.2 million asset Premier Members FCU, based in Boulder, and Farmers Union FCU, a $4.2 million asset credit union in Greenwood Village, Colo., announced they intend to merge operations, pending approval from the National Credit Union Administration (PR Newswire Jan. 20). They began merger discussions late last year. Premier Members' CEO Rhett Bartley Rowe noted that "executives and directors from both credit unions view this merger as very positive and anticipate having it completed by April 1," pending approval from regulators and members. Farmers Union members will vote on the merger proposal on March 18. Farmers Union FCU was established in 1949 to provide financial support to the National Farmers Union and insurance-related agencies. Its single branch serves more than 700 members. Premier Members began in 1966 as the credit union supporting the IBM facilities. IT has 11 branches and more than 41,000 members. This will be the second merger for Premier Members this year. It finalized its most recent merger with $72 million asset, Denver-based Colorado United on Jan. 1 (News Now Dec. 21) ... * DEARBORN, Mich. (1/21/10)--DFCU Financial, Michigan's largest credit union, with $2.5 billion in assets, has issued a $19 million "special patronage dividend" to about 90,000 members. The dividend was structured as a bonus to reward members for their relationship with the credit union. The dividends ranged from $50 to several thousand dollars. "I'm thankful that given today's economy, I belong to a credit union," said member Victor Baiardi of South Lyon. "It's a place that actually gives back. I don't see any other banks providing the level of service and cash back that DFCU offers, and that's why I belong. This Special Patronage Dividend will help my family with the challenges that so many others are also facing here in Michigan." President/CEO Mark Strobe referred to the dividend as "our own economic stimulus package because a large portion of the $70 million we've distributed the last four years has been put back into the local economy while also helping members." ... * MEDFORD, Ore. (1/21/10)--A California man known as the "Zombie bandit" because of his blank, mumbling demeanor during credit union and bank robberies, was sentenced Tuesday to 17 years in federal prison . David Hurwitz, 69, of Orleans, Calif., had been charged with armed bank robbery in Medford, Ore., and three additional robberies in Northern California in December 2008. Those robberies included the San Rafael branch of Santa Rosa, Calif.-based Redwood CU. He was arrested in January 2009 in Wyoming. Hurwitz previously was convicted in 1994 and 1995 for 10 bank robberies in Indiana, Ohio, Illinois and Michigan (Associated Press Newswires and Jan. 19) ...

Two CUs bring fee-free ATMs to remote Mexico

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CORDOBA, Mexico (1/21/10)--This past weekend, two credit unions in Mexico became the first rural financial cooperatives in the country to bring fee-free automatic teller machines (ATMs) and debit cards to their members.
Click to view larger image Luis Jara Pullas, World Council of Credit Unions (WOCCU) program director for Mexico; Dolores Rivera Ramírez, general manager of Caja Zongolica; and Brian Branch, WOCCU executive vice president and chief operating officer, show off the credit union's new debit cards at a press conference on Friday.
It is a landmark achievement for Caja Zongolica and Caja Yanga, credit unions that serve highly marginalized areas of the country, said the World Council of Credit Unions (WOCCU). Both credit unions participate in WOCCU’s development program in Mexico, funded by the Mexican Ministry of Agriculture, Livestock, Rural Development, Fishing and Food (SAGARPA) through its Proyecto de Asistencia Técnica al Microfinanciamiento Rural (PATMIR) project. “We've learned how necessary it is to have a well-run institution, but it's not enough,” Brian Branch, WOCCU executive vice president and chief operating officer, told the group gathered for Caja Yanga's ATM inauguration. “We need to bring financial services to members where they are--in their homes, businesses, rural areas--when they need it. Technology is the key to member service, and Caja Yanga and Caja Zongolica are examples for rural credit unions everywhere.” Branch was in Mexico before he traveled to Haiti Tuesday to help with earthquake relief efforts. Zongolica is an indigenous region, one of the poorest and most marginalized in Mexico, said WOCCU. It is best known for its coffee production and the beauty of its remote yet vast mountainous terrain. Despite sporadic downpours on Friday, hundreds of members gathered in Zongolica's main square to celebrate. “When the members saw the construction for the ATM installation [at the credit union], they asked me whose it was and which bank it belonged to,” said Dolores Rivera Ramírez, general manager of Caja Zongolica. “We are very proud that this credit union in the mountains was the first to employ this type of technology.”
Click to view larger image Rosa Pérez Tlaxcala, a founding member of Caja Zongolica, was the first to use the credit union’s ATM. (Photos provided by the World Council of Credit Unions)
Today, 16-year-old Caja Zongolica’s seven branch offices have more than 20,000 members. Rivera Ramírez said the new technology complements its growing portfolio of services and, while technology can seem “cold” without face-to-face interaction, the ATMs--open 24 hours--stimulate savings and save members time. Caja Zongolica's ATMs are currently on a closed network. The credit union hopes to connect with a national banking network later this year. For founding member Rosa Pérez Tlaxcala, 63, having an ATM at Caja Zongolica means she no longer has to wait an hour to withdraw money from a teller inside the credit union. Pérez Tlaxcala was the first member to use the ATM at Zongolica's branch office, withdrawing 200 pesos (US$15) from her savings account. She said she was very proud that the credit union was modernizing, and she looked forward to accessing her account from an ATM outside of Zongolica as the network expanded. Later this year, Caja Zongolica will implement point-of-sale devices in local businesses to sell air time for cellular phones, and its field officers will begin using personal digital assistant (PDA) devices to access account information and perform financial transactions when they visit members. Forty-five miles to the north, Caja Yanga will become the first rural credit union to join a national banking network when it connects later this year to Promoción y Operación, S.A. de C.V. (PROSA), a clearinghouse for electronic bank and credit card transactions in Latin America. The move means the credit union’s 40,000 members access their money and make purchases with their Caja Yanga debit card at any ATM or business throughout the country. “[The ATM project] brings quality services to members 24 hours a day, 365 days a year,” said Eduardo Rojas Camacho, board president of Caja Yanga. “It's very difficult to express what this means for members.” The credit union celebrated the official launch of its first ATM on Saturday and showcased how field officers use 35 PDAs to perform transactions when visiting members in 317 remote communities in Veracruz state. Field officers performed 80,960 online financial transactions on the PDAs in 2009.
Click to view larger image Caja Yanga’s new ATM machine will give members access to funds 24 hours per day.
“Caja Yanga wants to be a part of bringing financial services to people living in poverty in rural areas in a way that improves their quality of life and the economic development of our country,” Margarito Saavedra Morales, general manager of Caja Yanga, told the crowd at the inauguration. Caja Zongolica and Caja Yanga members can use the ATMs for withdrawals, balance inquiries, accessing a history of transfers and changing their personal identification numbers. Soon they will be able to purchase air time for their cellular phones and transfer money. Both credit unions worked with Enla-C, a credit union services group wholly owned by WOCCU, credit union associations and individual credit unions in Mexico, to achieve the necessary levels of compliance and security with the lowest possible commission rates. Enla-C serves financial cooperatives. It achieves economies of scale with the demands of its shareholders and thereby offers products such as debit cards at discounted rates, making the buy-in for small credit unions much more affordable. Both Caja Zongolica and Caja Yanga will have fully operational ATMs in three branch offices within several weeks. In addition to the ATM in Zongolica, Caja Zongolica has installed ATMs in Tequila and Atlahuilco, and Caja Yanga has ATMs in Yanga, Córdoba and Cuitlahuac. Another credit union, Caja Las Huastecas, will install ATMs in rural Querétaro (northern Mexico) later this year.