LAS VEGAS — There have been both expected and unexpected rippling effects from the Great Recession. In certain respects, non-traditional members are seeking credit unions, which can be viewed as a double-edged sword when it comes to fraudulent behavior.
"We are a community chartered credit union," said Kristen Williams, AVP of administrative services for One Nevada Credit Union. "Since the beginning of the recession our membership base has changed dramatically."
Among new potential members were the throngs of transient construction workers reeling from the now failing but once booming Las Vegas housing and construction industry.
"We are seeing more and more members that fall outside of the traditional banking environment. With that comes increased risk," said Williams.
In an effort to stem the tide, One Nevada CU adopted Early Warning Services' Deposit Chek Service in 2009.
The implementation process went smoothly, according to Williams.
The credit union decided to implement the new solution not only because of the influx of non-traditional members, but also because it needed to provide an option at the teller window that could more quickly identify risk with check deposits. An additional issue was that more checks were being deposited through ATMs.
"Because our return-check volume had been increasing, we felt it necessary to find a solution that could offer some advanced warning of possible returns," said Williams. "We needed a solution that would allow us to send a batch file daily and provide the same return information. There were no other options explored because at the time there weren't other vendors offering this service."
Identified Risks
With $700 million in assets, 250 employees and 75,000 members supporting 15 branches, One Nevada CU again assumed the possibility of risk last year when it adopted deposit remote capture.
And not long ago, risks were identified.
"Mobile deposit capture items are processed hourly and a file is sent to Early Warning hourly because of the potential risk. Very recently an item deposited via mobile deposit came back with a hard hit - the item was going to return," said Williams.
Upon further investigation of the member who made the deposit, it was determined that said member was the victim of an online dating site scam. She was duped into believing she was in a relationship with someone she never met in person.
The member then provided this person with her personal banking information, which allowed him access to make a mobile deposit into her account.
"Had we not sent that item to Early Warning as quickly as we had, that member could have withdrawn the funds to send back to her 'boyfriend' and lost $2,500, which the credit union would have likely charged off," said Williams.
Early Warning Deposit Chek Service provides advance notification of potentially high-risk deposits at the point-of-transaction. This, in turn, enables credit unions to expedite funds availability decisions by validating the existence and status of checking and savings accounts at the time of transaction.
With this technology, One Nevada CU ranges anywhere from $75,000 to $150,000 of additional holds placed, which significantly reduces its exposure to risk for deposit items.
Though some staff training was involved, adoption of the solution is pretty intuitive and seamless, according to Williams. "We create a data file that is sent via a Pathways connection that we have with Early Warning directly."
Moving forward, One Nevada expects that the solution will continue to benefit both the credit union and its members.
"In most instances it saves the member any possible losses. In other cases, it stops abuse from members that cost the credit union money," Williams said.
