NAFCU Journal May June 2021

22 THE NAFCU JOURNAL May–June 2021 “Some of the checks are real, but they are unemployment checks that were obtained with fraudulent applications to the state,” says Erica Hoover, assistant vice president of deposit and branch operations for Service First and the credit union’s Bank Secrecy Act (BSA) officer. Credit union members will deposit the check because they are told that their new friend does not have a checking account. “The majority of the time, our members do not realize that they are part of the fraud—and liable for illegal activity.” “We almost never dealt with this type of fraud before 2020, but there has been a significant increase,” says Brian Munsterteiger, vice president of enter- prise fraud at Randolph-Brooks Federal Credit Union. Although there are some members who are tricked into believing that they are helping a newly-acquired friend or romantic partner, there are also some members who are interested in the money they receive for participation. “Members will get a message via social media that if they have an account at a particular financial institution, they should tap a link, then they receive a direct message with more specific guidance,” he says. “The criminals are very knowledge- able about our system and can direct the members on how to use our ATM for deposits or how to make an e-deposit to put the check into their account.” There has also been a rise in smish- ing—the text message version of email phishing, says Darla Huff, vice president and chief risk officer for Visions Federal Credit Union. “A member will get a text message purportedly from Visions asking for verification of login or other personal information, which we would never do,” she explains. Although people are more aware of the risk of fraudulent email messages, they are not as skeptical of text messages, especially if the message names their credit union. Enhanced Fraud Detection To fight the increase in fraud, credit unions are enhancing their ability to identify and prevent fraud. “Our member-facing employees are our first line of defense,” explains Hoover. “We conduct ongoing training with employees so they know how to recognize potential fraudulent transactions and escalate their concerns to a BSA employee.” While the Sometimes it begins as a romance scam with our member thinking they are helping a new romantic partner by depositing what appears to be a payroll check. JENNIFER AKES, COMPLIANCE SPECIALIST AT SERVICE FIRST FEDERAL CREDIT UNION