How credit unions can fight back against account takeover fraud and scams

It’s all over the headlines: financial fraud is higher and costlier than ever before. Credit unions in particular have been hit hard by the meteoric rise in financial fraud: according to Alloy’s 2024 State of Fraud Benchmark Report, 79% of credit unions and community banks experienced more than $500,000 in direct fraud losses in 2023—higher than any other segment surveyed.

While digital channels are critical for providing high-quality member experiences, their increasing prevalence in financial services has provided fraudsters with new opportunities to infiltrate and attack credit unions and their members.

Account takeovers are hitting credit unions hard

One of the most insidious forms of fraud to emerge in the era of digital financial services is account takeover fraud, which is when a fraudster gains unauthorized access to a member’s account.

Account takeover fraud may occur when a member is scammed into revealing personal information, ultimately opening the door for fraudsters to access and take control of their account. Account takeover can also occur on other channels, such as if a fraudster impersonates a member at a branch, making it difficult to detect and address.

 

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