Protecting CU Members from Phishing Scams

​Phishing scams targeting credit union members are increasingly using fraudulent text messages to steal login credentials, prompting the need for proactive measures and collaboration to protect accounts.

As phishing scams targeting credit union members continue to rise, across the Dakotas and beyond, proactive measures and collaboration are proving to be essential defenses. Recently, these scams have been deploying fraudulent text messages to lure members to fake websites, where their login credentials are harvested and accounts exploited.
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Despite the increasing sophistication of these threats, credit unions are stepping up with solutions to safeguard their members. One Dakota credit union recently demonstrated the power of vigilance and strategy, successfully preventing over $145,000 in potential losses. Their approach can serve as a guide for others:

• Enhanced Transaction Monitoring:
  • The credit union receives detailed ACH micro-transaction reports five times daily, enabling them to flag suspicious activity quickly.
  • Transactions from trusted institutions like USAA and Navy Federal are typically considered low-risk, but those from lesser-known entities, such as Green Dot or Piedmont Bank, are scrutinized immediately.

• Historical Analysis:
  • By reviewing three weeks of ACH transaction history, the credit union identifies anomalies that may signal fraudulent patterns.
• Geographical and IP Analysis:
  • Transactions with mismatched geographical locations, such as IP activity in Florida linked to accounts in North Dakota, are flagged for further investigation.
• Comprehensive Documentation and Collaboration:
  • Suspicious activity is documented thoroughly, and compliance and audit teams are notified to ensure systematic follow-up and resolution.

This layered approach has proven nearly 100% effective in stopping phishing scams before any losses occur.

What Your Credit Union Can Do:
To protect your members and enhance trust, consider adopting a similar strategy. Additionally, launch a member education campaign to empower your community which could include things like preparing members through tax season, and other periods of time when scams are most prevalent; focusing on current fraud trends such as this one utilizing text messaging; sharing information on how members can report fraud to the Federal Trade Commission (FTC) and take steps like freezing their credit reports; and your credit unions commitment to protecting them.

For credit unions seeking additional guidance or collaboration on anti-fraud strategies, contact DakCU or John Alexander at [email protected]. By working together, we can create a stronger defense against scams and protect the financial security of our members.