The fraud game is changing. Before the days of counterfeiting checks and online and mobile banking, a fraudster stole your wallet or purse and attempted to use your checks or credit cards. Today, there are still stolen wallets, but there are also counterfeit checks, credit card fraud, online banking fraud, and a host of other scams and tricks brought about by advances in banking technology.
“We’ve always had fraud, but as you bring out new products, it often provides an opportunity for fraudsters to take advantage of the products,” says Caroline Twitchell, manager of the fraud department at America First Credit Union.
At America First ($5.83B; Ogden, UT), education is key to fighting fraudsters on new fronts. The credit union’s website has a security section that explains different types of fraud to members and organizes fraud into category types such as online, mobile, and email. The section is the result of collaboration among the fraud department, an outside IT security group, and the marketing team.
“We’re a credit union, we need to teach financial responsibility to our members and part of that piece is teaching them what to be aware of and how to avoid fraud,” Twitchell says.
The educational content in the security section is partially written by Twitchell and partially aggregated from neutral government websites — such as FTC.gov and FBI.gov — that provide helpful data. Twitchell cautions that although information provided by vendors can be helpful, it also tends to come with a bias toward their product. America First’s security section also features content taken from security and fraud presentations the credit union gives to community groups and to members.
“In years past we’ve done identify theft seminars and things,” Twitchell says. “So I took a lot of that content and reused it.”
The fraud team meets quarterly to review content and update the website. The team also immediately alerts members when a new fraud that poses a substantial risk comes online. Reaching America First’s large membership — it topped 618,000 as of September 2013 — can be a bit of a challenge, so the credit union occasionally uses homepage banners to alert members to new frauds. It also includes fraud and security updates in its quarterly newsletter.
“We try to hit every avenue we can,” Twitchell says.
Although the credit union tracks fraud in which the institution takes a loss, it is difficult to track prevented fraud, whether it be by education or other means. But from talking to other financial institutions, Twitchell says the education outreach is working.
“If you look at the number of fraud losses — incidents and dollar losses — for the size of our organization, I think we’re below our peers,” she says. “Especially when you look at the number of services we offer.”
Being a large credit union, America First has many resources to dedicate to fighting fraud, but it also uses it size to help out smaller institutions.
“We offer assistance to other credit unions if they need fraud training or need us to look over a program or product,” Twitchell says. “I’ve been encouraged by our management to do that, so we’re more than willing, especially with a lot of the new online products.”
And online banking is where much of today’s fraud occurs; it poses less of a risk to the fraudster and provides more opportunities to snatch a wallet.
“We need to learn to think like a fraudster to put the controls in place to minimize losses and educate members,” Twitchell says.