The NAFCU Journal March-April 2020 - 14

BITS OF INFORMATION

For James E. Santos, vice president of
account services for Randolph-Brooks
Federal Credit Union (RBFCU) in Texas,
servicing accounts is "the overarching
thread" in a department overseeing deposit
services, corporate fraud, overdraft protection and account-level asset protection.
"We have a lot of systems that run pretty
much in harmony, and sometimes a
transaction will jump onto the fraud rail,"
Santos says. In many cases, the credit
union steps in to protect members from
losses, because "if they're subject to a
scam, they're really on the hook for that."
If the credit union reimburses members for
losses due to fraud, then the institution is
a victim as well. And while members can
be victims, they also can be perpetrators,
or a little of both - not the instigator, but
perhaps a willing participant who passes a
bad check as a favor to a friend, he says.
Even the constant stream of data
breaches at national chains and institutions ripples back to credit unions.
"In all of those situations, you know your
members' information has been compromised, which means bad actors are going
to try to use that information to take over
your members' accounts," says Jacqueline
M. Jackson, vice president of risk and
compliance for Cleveland, Ohio-based
Century Federal Credit Union.

''

You have this huge credit union
house and all its rooms, and they
have to connect. The bad guys
are out there searching 24/7. They
find the weakest link, and they
jump on it.

''

- ANN DAVIDSON, VICE PRESIDENT OF RISK CONSULTING,
ALLIED SOLUTIONS

The growth in digital wallets, such as
Venmo and Square Cash, will help make
2020 "the year of non-face-to-face fraud,"
Davidson says.
Fraudsters are adept at piecing together
full portraits from tiny details about credit
union members or officials. The tactic
bolsters two emerging fraud schemes -
business email compromise and synthetic
identities - and gives new life to fraudsters' tried-and-true phishing tactics.
Business Email Compromise (BEC): An
employee opens an email from a credit
union official loaded with details confirming that the official is the real thing. The
official requests that money be wired to
an account, and the employee complies
- except that the money is going to an
organized crime ring's account.
In a variation, fraudsters call or text
members from credit union call center

numbers, pretending to be fraud teams
sending "alerts" that, when responded to,
provide access to accounts.
Bad actors can find personal and organizational details almost anywhere. Credit
union websites offer "a treasure trove" of
information that fraudsters use, Davidson says. She advises weighing "need
to know" versus "nice to know" when
deciding what to post.
Synthetic IDs: Fraud perpetrators create
a fictional person using slight changes
to a real person's name, Social Security
number and date of birth. Accounts are
opened, and loans are taken out using
the fake person's information. When
loanees default, they are nowhere to
be found.
"It's what they call a 'Frankenstein,' " says
Santos. "That 'person' isn't a person,
really." Monitoring transactional behavior for abnormal patterns and using
verification technology can help weed
out synthetic identities, he says. It's also
important to double-check loan application information using other sources.
Phishing: The practice of phishing, or
sending legitimate-appearing emails that
lure targets into sharing information
or clicking malicious links, is "always a
concern," Santos says. RBFCU's IT system rejects emails demonstrating certain
parameters, such as suspicious domains
and servers.
One sophisticated phishing scheme started
when perpetrators collected enough bits
of information from a credit union call
center to "alter accounts as an authoritative

14

THE NAFCU JOURNAL  MARCH-APRIL 2020



The NAFCU Journal March-April 2020

Table of Contents for the Digital Edition of The NAFCU Journal March-April 2020

The NAFCU Journal March-April 2020 - Cover1
The NAFCU Journal March-April 2020 - Cover2
The NAFCU Journal March-April 2020 - 1
The NAFCU Journal March-April 2020 - 2
The NAFCU Journal March-April 2020 - 3
The NAFCU Journal March-April 2020 - 4
The NAFCU Journal March-April 2020 - 5
The NAFCU Journal March-April 2020 - 6
The NAFCU Journal March-April 2020 - 7
The NAFCU Journal March-April 2020 - 8
The NAFCU Journal March-April 2020 - 9
The NAFCU Journal March-April 2020 - 10
The NAFCU Journal March-April 2020 - 11
The NAFCU Journal March-April 2020 - 12
The NAFCU Journal March-April 2020 - 13
The NAFCU Journal March-April 2020 - 14
The NAFCU Journal March-April 2020 - 15
The NAFCU Journal March-April 2020 - 16
The NAFCU Journal March-April 2020 - 17
The NAFCU Journal March-April 2020 - 18
The NAFCU Journal March-April 2020 - 19
The NAFCU Journal March-April 2020 - 20
The NAFCU Journal March-April 2020 - 21
The NAFCU Journal March-April 2020 - 22
The NAFCU Journal March-April 2020 - 23
The NAFCU Journal March-April 2020 - 24
The NAFCU Journal March-April 2020 - 25
The NAFCU Journal March-April 2020 - 26
The NAFCU Journal March-April 2020 - 27
The NAFCU Journal March-April 2020 - 28
The NAFCU Journal March-April 2020 - 29
The NAFCU Journal March-April 2020 - 30
The NAFCU Journal March-April 2020 - 31
The NAFCU Journal March-April 2020 - 32
The NAFCU Journal March-April 2020 - 33
The NAFCU Journal March-April 2020 - 34
The NAFCU Journal March-April 2020 - 35
The NAFCU Journal March-April 2020 - 36
The NAFCU Journal March-April 2020 - 37
The NAFCU Journal March-April 2020 - 38
The NAFCU Journal March-April 2020 - 39
The NAFCU Journal March-April 2020 - 40
The NAFCU Journal March-April 2020 - Cover3
The NAFCU Journal March-April 2020 - Cover4
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