Volunteer Corporate Credit Union
Nashville, Tennessee - Photo Courtesy of Barry Shulam
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March/April 2017 Issue: Front Page > Industry Info

Industry Info
Wire Fraud Prevention Tips
Interest Rate Graph VolCorp has been seeing an uptick in fraud, especially in domestic and international wire transfers. Fraudsters frequently take advantage of the speed of wire transfers and the difficulty of recovering funds once they have left your financial institution. Often times, the fraudsters are at the receiving institutions waiting to grab the funds as soon as they arrive. Once this happens, more often than not, the money is gone and there is no recourse for the sender to retrieve the funds. Remember, these fraudsters are professionals.

Some things you can do to prevent wire fraud:
  • Have a solid “Know Your Member” program and risk rate your members.
  • Know what type of activity to expect from your members and if it’s out of the ordinary, ask questions.
  • Have policies and procedures in place and make sure they are being followed (For example: set dollar limits, have authorized staff for funds transfer, call back procedures, etc.).
  • Take care of elderly members, as they are often targets of fraud.
  • Don’t be afraid to ask questions about the source of funds, beneficiary, or purpose of payment.
  • Don’t accept wiring instructions from an email. This poses a huge security risk and too many things can go wrong here.

The larger financial institutions are de-risking, meaning they are opting to end relationships that pose more risk than potential returns. With risk appetite declining in larger financial institutions, it is possible these high risk accounts are being pushed to medium to small credit unions or community banks. However, these smaller institutions may lack the capacity to have effective practices in place to fight fraud, money laundering, terrorist financing, elder abuse, etc. This means we are dealing with more fraud than we’ve experienced in the past. It pays to be a little suspicious.

You are the gatekeepers who can help reduce the risk of the credit union being used to accomplish these crimes.

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