With the overwhelming number of records being exposed in data breaches (3,353,172,708 in the first half of 2018), identity theft and data security remain at the forefront of news coverage, both nationally and locally.
Credit unions have historically been created to help their members. “Serve people, not profit” comes to mind. This has been the case since November 24th, 1908 when the first credit union in the United States was formed. The credit union ideal of serving the communities in which the exist is not new, but in some respects, they are falling short.
I speak everyday to credit unions about identity theft, and some are doing it very well, they offer full services to help their members, either at a discounted rate, or for a small nominal fee, either yearly or monthly, to be taken out of the members accounts. Some credit unions put basic information about Identity theft, provide a few tips, maybe point them to the Federal Trade Commission website and hope the member goes there for the answers to the questions they have. These are the two answers that lie in direct contrast to one another, yet these are probably the two best answers any credit union can give. Let’s take a very elementary look as to why…
Credit Union A:
Has invested in a full program offering their members comprehensive identity theft protection and credit monitoring, either through the credit union’s self-directed program or with a partnership with a third party, such as True ID Pro. The member has comprehensive coverage and has a reasonable amount of assurance that their credit union is offering the services they want (61% of people go to their primary financial institution looking for this service, before anywhere else).
Credit Union B:
Has no information other than a few safety tips, and a link to the Federal Trade Commission website so the member can get more information. Although the member does not have any identity theft or credit monitoring, they also know that the credit union is not providing any services to protect them outside of those four walls of the credit union. They know they need to go elsewhere, to get the protection they need.
In both scenarios the member knows exactly where they stand and has a reasonable idea of the role their credit union will play in the unfortunate event the member is impacted by identity theft.
The problem comes somewhere in the middle.
Credit Union C:
This credit union offers free credit monitoring for all their members, again, either through a self-directed program, or through a partnership with a third-party service that allows a member to be notified to any changes on their credit report.
At first glance this looks to be a reasonable offering. But credit monitoring is not identity theft protection
Although there is some merit to that idea, which is why it is so tempting for credit unions to offer these programs, and it’s true that users of these services do have more tools to monitor and catch some identity theft. However, utilizing these tools as the primary source of protection against identity theft has some inherent flaws.
First, only about 10% of identity theft victims have a credit account opened in their name. The most common type of fraud uses an existing account, and credit monitoring alone, may not catch a change in a balance, as there is no way to differentiate between a normal purchase, or a fraudulent one.
Secondly, emphasizing only credit monitoring provides the member with a false sense of protection and security, as it won’t catch tax related fraud, benefits applied for in the members name, or medical identity theft, although the credit monitoring alone ma catch the medical debt, once it is placed for collections.
Let’s go back to the member at Credit Union C. They have been the unfortunate victim of identity theft, they may not even know it yet.
But when they do find out they have been the victim of identity theft, that does not contain a credit account, they may end up in your office asking lots of questions, that you likely don’t have the answers they will be looking for.
An interesting statistic from a recent Javelin research report has shown that If a consumer is the victim of identity theft, and a new account is opened at a different institution, the consumers degree of confidence in their primary institution, drops 47% because there is no way for them to easily resolve the matter.
Credit unions and their members can benefit from a Comprehensive Identity Theft and Credit Monitoring program, such as True ID Pro, as it can help engage members, and members can gain a valuable partner on protecting their information in their credit union.
No matter which credit union you are, compliance and transparency are key to any identity theft program and it must prioritize the member, not the credit union.