NWCUA’s Katie Clark Shares Insights on the Latest Fraud Schemes Hitting Northwest Credit Unions


From analytics to artificial intelligence and the cloud, the pace of technology adoption continues to advance for credit unions. But as technology evolves and changes, so do the threats of technology-based fraud schemes.

In addition to the standard threats (data breaches, card skimmers, phishing, etc.), fraudsters are learning ways to leverage technology aimed at making life easier for consumers coupled with some of the older, more common schemes and scams, said Northwest Credit Union Association Director of Regulatory Affairs and Risk Management, Katie Clark.

One recent scam involved a card management app that was used to commit fraudulent purchases with compromised debit card information. The fraudsters were able to register for a card management app (which allows the cardholder to turn debit cards on and off and receive alerts about purchases) and use that app to circumvent the fraud detection service provided by the credit union’s card services vendor.

Another credit union reported that a member fell victim to a peer-to-peer payment scam where the member accepted funds from unknown individuals under instruction from his employer (whom he found via an advertisement on Craigslist).

In addition to accepting peer-to-peer transfers from unknown individuals, the member also deposited a fraudulent check and withdrew the funds to purchase bitcoin. The bitcoin was then placed in a mobile wallet for the employer. This scheme leveraged the well-known job scam with the new payment technology of instant transfers that peer-to-peer services provide.

“With the vast number of scams targeting members, it is important that credit unions share and leverage information,” said Clark. “Sign up for fraud alerts from your Association, check the alerts available from your bonding agency, card services vendors, and security vendors, and join groups like the NWCUA’s Risk Management Council that provide an opportunity to discuss fraud issues like these with your peers. Information and education are the best tools we have.”

To sign up for fraud alerts, log in to your NWCUA account online here and scroll down to the bottom of the page. Click on the green subscribe button on the bottom right side of the page.

The Risk Management Council is a new addition to NWCUA’s Councils program for 2019, and will provide an opportunity for professionals in various risk-related roles to discuss trends, share best practices, and discover solutions to shared challenges. The Council meets twice each year and registration for the April 18 session is now open. For more information on fraud prevention or the Risk Management Council, contact Clark.

Posted in Fraud Alert.