Card Fraud Costs Credit Unions $100M in 2005

With credit union losses totaling $100 million dollars from credit and debit card fraud in 2005, securing member identity is definitely keeping credit union executives up at night.

 
 

Credit and debit card fraud is a top-of-mind issue for credit unions with card programs. According to CUNA Mutual, these credit unions lost $100.1 million because of fraudulent activity during 2005, which is 18 percent more than the $85.9 reported in 2004.

A recent BusinessWeek article pointed out that smaller financial institutions have greater risk for identity theft, such as credit card fraud. This is because larger institutions have bigger budgets and more resources to fight fraud.

The risk associated with identity fraud goes beyond just the millions of dollars lost each year. “Even though card issuers are not responsible for breaches, each one undermines the relationship a credit union has with its members,” says Jeff Post, President and CEO of CUNA Mutual.

Identity Theft Hotspots

Below is a list of major metropolitan cities in the US that have the most identity theft claims per 100,000 in population. Also noted are the number of credit unions and their members that could potentially be at risk in these cities.

Identity Theft Customer Complaints
Data as of January 1 - December 31, 2005

 

Metropolitan Statistical Area (MSA)

# of Complaints per 100,000 in Population

# of
CU's

# of CU
Members

1

Phoenix-Mesa-Scottsdale , AZ

178.3

32

1,069,824

2

Las Vegas-Paradise, NV

158.5

15

339,687

3

Riverside-San Bernadino- Ontario, CA

145.7

10

175,190

4

Dallas-Fort Worth- Arlington, TX

141.2

104

1,366,210

5

Los Angeles-Long Beach- Santa Ana, CA

134.9

207

2,992,388

6

Miami-Ft. Lauderdale-Miami Beach , FL

131.7

26

331,346

7

San Francisco-Oakland-Fremont , CA

130.7

29

511,880

8

Houston-Baytown-Sugar Land , TX

128.1

115

1,088,511

9

San Diego-Carlsbad-San Marcos, CA

121.4

30

953,543

10

San Antonio , TX

119.1

31

1,354,782

Totals

599

10,183,361

Source: Identity Theft Data Clearinghouse

With credit and debit card fraud being a major concern for credit unions, Callahan & Associates is interested in hearing your response to the issue. Click here to tell us the steps that your credit union is taking to prevent identity theft for your members.

 

 

 

April 10, 2006


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