The NAFCU Journal November-December 2019 - 42

MANAGEMENT INSIGHT

Superior Member Service
Includes Effective
Fraud Prevention
By Jim Hunsanger

C

redit union members continue
to be the targets of organized
fraud rings seeking to exploit
the relationship between
financially vulnerable individuals and
member-friendly credit unions. Recent
studies and actual events confirm that
financial fraud is growing and becoming
increasingly sophisticated.

As we seek to provide superior service
and be our members' trusted financial
institution, we have an obligation to
maintain effective fraud prevention
programs to help our members protect
their accounts. There are many components to an effective program; here are
several key considerations.

Know Your Members
Who Are at Risk

While fraudsters can target anyone,
they can be particularly effective when
victimizing the financially vulnerable.
This often includes individuals of modest
means, students and the elderly. Knowing your members who are most at risk
should inform your fraud monitoring
and training programs.

Provide Training

Credit unions should ensure that all
member-facing employees receive
periodic training to identify red flags for
fraudulent activity. Employees should
also be trained on having conversations with members who may not be
aware that they are being defrauded. It
is important to ensure employees are
empathetic with the defrauded member
42

in order to effectively work through
resolving the situation.

focused on fraud prevention and make
connections with local law enforcement.

It is also important to provide resources
to members informing them of ways to
protect themselves from being defrauded.
Information can be disseminated
through your credit union's website or
monthly newsletter, or through an educational seminar provided by the credit
union, among other options.

Understand and Embrace
Technology

Create Effective Internal
Communication Channels

Fraudsters may target isolated members
or groups of members, depending on
the particulars of the fraud being perpetrated. Members who are targets of fraud
may utilize various service channels, and
credit union employees working in these
channels may identify red flags at any time.
Ensuring that information about each
targeted account is being forwarded to
your fraud prevention department is crucial so that fraud trends can be effectively
identified. Effective communication goes
both ways, and fraud prevention departments should have a process to notify all
member-facing areas whenever any trends
are identified. This department should also
provide member-facing employees with
specific tips for protecting members that
are tailored to each identified trend.

Be Aware of New Trends

Ensuring your credit union stays informed
of fraud trends is critically important.
Your fraud prevention department should
utilize local or regional fraud prevention
groups, attend webinars and conferences

Payment technology changes are providing new and exciting options for members, but they can also provide avenues for
members to be defrauded. Ensuring your
credit union's fraud prevention department understands potential fraud impacts
on payment strategies is critical.

Additionally, fraud prevention technology continues to advance, and credit
unions should be open to adopting new
systems focused on fraud prevention.
Working closely with your fraud prevention software providers is an important
component of an effective fraud prevention program.

Offer Superior Service

It takes a comprehensive strategy to
maintain an effective fraud program that
protects our members. However, understanding current fraud trends, knowing
your vulnerable members, being open
and adaptable to technology changes,
and keeping employees and members
informed of the red flags for fraud will
help your credit union stay on the forefront of the fight against fraud.
Jim Hunsanger is the chief risk officer
for Michigan State University Federal
Credit Union. He recently spoke at both
NAFCU's BSA Seminar and Risk
Management Seminar.

THE NAFCU JOURNAL NOVEMBER-DECEMBER 2019



The NAFCU Journal November-December 2019

Table of Contents for the Digital Edition of The NAFCU Journal November-December 2019

The NAFCU Journal November-December 2019
Contents
Conferences
From the Chair
Washington and Industry Briefs
The Bottom Line
Welcome, New Members
Leading the Charge
Test for Success
Test for Success
Executive Spotlight
Management Insight
Compliance Central
Inside NAFCU Services
From the President’s Desk
The NAFCU Journal November-December 2019 - The NAFCU Journal November-December 2019
The NAFCU Journal November-December 2019 - Cover2
The NAFCU Journal November-December 2019 - Contents
The NAFCU Journal November-December 2019 - 2
The NAFCU Journal November-December 2019 - Conferences
The NAFCU Journal November-December 2019 - From the Chair
The NAFCU Journal November-December 2019 - 5
The NAFCU Journal November-December 2019 - Washington and Industry Briefs
The NAFCU Journal November-December 2019 - 7
The NAFCU Journal November-December 2019 - The Bottom Line
The NAFCU Journal November-December 2019 - 9
The NAFCU Journal November-December 2019 - 10
The NAFCU Journal November-December 2019 - 11
The NAFCU Journal November-December 2019 - 12
The NAFCU Journal November-December 2019 - Welcome, New Members
The NAFCU Journal November-December 2019 - 14
The NAFCU Journal November-December 2019 - 15
The NAFCU Journal November-December 2019 - 16
The NAFCU Journal November-December 2019 - 17
The NAFCU Journal November-December 2019 - Leading the Charge
The NAFCU Journal November-December 2019 - 19
The NAFCU Journal November-December 2019 - 20
The NAFCU Journal November-December 2019 - 21
The NAFCU Journal November-December 2019 - 22
The NAFCU Journal November-December 2019 - 23
The NAFCU Journal November-December 2019 - 24
The NAFCU Journal November-December 2019 - 25
The NAFCU Journal November-December 2019 - Test for Success
The NAFCU Journal November-December 2019 - 27
The NAFCU Journal November-December 2019 - 28
The NAFCU Journal November-December 2019 - 29
The NAFCU Journal November-December 2019 - 30
The NAFCU Journal November-December 2019 - 31
The NAFCU Journal November-December 2019 - Test for Success
The NAFCU Journal November-December 2019 - 33
The NAFCU Journal November-December 2019 - 34
The NAFCU Journal November-December 2019 - 35
The NAFCU Journal November-December 2019 - 36
The NAFCU Journal November-December 2019 - 37
The NAFCU Journal November-December 2019 - 38
The NAFCU Journal November-December 2019 - 39
The NAFCU Journal November-December 2019 - Executive Spotlight
The NAFCU Journal November-December 2019 - 41
The NAFCU Journal November-December 2019 - Management Insight
The NAFCU Journal November-December 2019 - 43
The NAFCU Journal November-December 2019 - Compliance Central
The NAFCU Journal November-December 2019 - 45
The NAFCU Journal November-December 2019 - Inside NAFCU Services
The NAFCU Journal November-December 2019 - 47
The NAFCU Journal November-December 2019 - From the President’s Desk
The NAFCU Journal November-December 2019 - Cover3
The NAFCU Journal November-December 2019 - Cover4
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