What fraud fighting tools are in your toolbox?

There’s only one constant about fraud — and that is it’s constantly changing. Fraud is fluid, dynamic and often different from one day to the next. When one method ceases to be effective, not surprisingly, another variant pops up. This perpetual state of “fraud flux” creates challenges for many credit unions, who often have a tough time keeping up with the rapidly changing nature of fraud loss avoidance, risk mitigation and member experience issues facing them on a daily basis.

According to the Federal Trade Commission (FTC), American consumers lost more than $5.8 billion to fraud in 2021, a 70% increase from the $3.4 billion lost in 2020. As instances of fraud continue to rise, this number will continue to grow. Almost 2.8 million consumers filed a fraud report with the FTC in 2021. About 25% of those scams lead to a financial loss, with the average loss being approximately $500 per person — and those are just the people who actually reported fraud to the FTC.

There are always going to be bad actors, and instances of fraud are continuing to increase, probably even more so due to the uncertain economy. However, many credit unions are not able to handle such a high volume of fraud — they don’t have the resources, tools, training or data to keep up. Partnering with tenured anti-fraud professionals, who have “in the trenches” financial institution experience, can be a valuable tool in a credit union’s fraud-fighting arsenal.

Current Challenges Facing the Financial Services Industry

Due to a variety of factors, including the post-COVID employment economy and the current state of corporate hiring, as well as trends in the fraud space, many credit unions are having challenges hiring the experienced staff necessary to meet their operational needs.

 

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