PROVIDENCE, R.I.-Account-opening fraud could be better fought if credit unions had a better system of communication.
According to Andrea Hunter, project manager with Andera, which provides online account-opening solutions, criminals don't just generally target one single institution. That's why she said "credit unions need to be more willing than they were in the past to share information with each other so that they can help each other combat these specific fraudsters."
That's particularly important given all the new members who joined as a result of Bank Transfer Day. While credit unions often rely on a mix of both third-party verification of member identities and manual checks, "credit unions sometimes didn't bother to run those [third-party] checks when things weren't as high volume."
Hunter urged awareness of any kind of patterns that might be indicative of fraud. While criminals aren't going to use the same name and Social Security number multiple times, at some point in the process, she said, a pattern usually emerges, such as having the same phone number associated with multiple accounts or several online account-openings coming from the same IP address.
Hunter said that Andera's data show that fraud at credit unions has not greatly increased since Bank Transfer Day, but she still recommended a mix of both manual and automated reviews of new memberships to help keep fraud numbers as low as possible.
In addition to third-party verification systems, Hunter continues to advocate for the use of out-of-wallet questions as a way to identify new members' identities. While some have said those aren't a secure enough (see related story), Hunter stressed that the most effective strategy is a mix of information pulled from both credit reports and public information.
