Top 10 emerging risks for CUs outlined at ACUC

BOSTON (6/23/09)--Today's fraud landscape is becoming more complex, featuring extensive intertwined risks--some old but with new wrinkles and some emerging at the pace of new technologies. The emerging risks will require credit unions to adopt rigorous, cross-channel fraud monitoring strategies, a CUNA Mutual risk expert said Monday.

Ann Davidson, CUNA Mutual Group, noted that the tough economy is not only motivating criminals but also "people you never thought would commit fraud." The product manager of the Credit Union Protection risk management spoke about emerging trends in risk and fraud during a breakout session at America's Credit Union Conference and Expo in Boston. (Photo provided by CUNA Mutual Group)
Ann Davidson, speaking Monday to a standing room only crowd at the America's Credit Union Conference (ACUC) and Expo in Boston, recommended taking a holistic view of fraud. That means realizing that a particular fraudulent act may not directly or immediately result in a loss but may later manifest itself in another form.

Fraud schemes are increasing as a tough economy motivates not only criminals but also "people you never thought would commit fraud," Davidson said.

She outlined the 10 hottest schemes in 2009 facing credit unions. They are:

  1. Phishing (e-mail), smishing (texting) and vishing (telephone);
  2. I.D. fraud;
  3. System intrusion;
  4. Cyber crime;
  5. Data breaches;
  6. Transaction fraud;
  7. Mortgage fraud;
  8. Internal fraud;
  9. External fraud involving numerous and varied scams;
  10. Other emerging risks, involving compliance and regulation, and new account, existing account and check image home banking fraud.

The best way to thwart fraud by preventing it is "Education, education, education,"--educating employees and members, Davidson said. Identifying root causes and using a fraud management system can prevent or minimize risks. She offered these preventative tips:

  • Implement best practices that engage all employees;
  • Measure savings by the effectiveness of the loss-prevention tool;
  • Share information to help other credit unions and members;
  • Be proactive--it pays off;
  • Ensure prevention processes and tools are in place and delivering intended results;
  • Find the critical balance between risk management and member service for the credit union; and
  • Implement a cross-channel fraud prevention solution on all transactions and at the member account level.

ACUC is presented by the Credit Union National Association. It ends Wednesday. Check out further coverage in News Now's blog and at Credit Union Magazine's website. Use the links for more.

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