Keeping an Eye Out for Shared Branching Fraud

Earlier this week, a fraudulent Shared Branching transaction impacted a local credit union. What transpired in Maine is also happening outside our borders. Because we want to prevent fraud from impacting you and your members, we are sharing information about this latest scheme and encourage you to alert your staff about this activity.

What Is Happening

Fraudsters are trying to withdraw funds using compromised accounts which may belong to former executives, employees, or board members of credit unions outside of Maine. In the scenario that occurred this week, an individual came into a local branch with an ID in the name of a member from Sound Credit Union in Washington State. The individual withdrew $1,000 from that member’s account. When Sound Credit Union contacted the Maine branch about the transaction, they indicated the account was compromised. They also shared that they are seeing an uptick in fraudulent activity in Maine.

Please keep in mind that this type of fraud is a serious form of identity theft and credit unions should use caution when processing transactions for out-of-state issuer credit unions. Additional steps staff can take include using a blacklight on IDs, checking IDs against the “ID Check Guide,” and pulling a two-day history prior to completing a withdrawal to review for suspicious activity. Staff also should be encouraged to seek second approval from a member of the credit union’s management team if ever in doubt about a transaction.

Join the Monthly Fraud & Compliance Discussion

The League is now hosting a monthly fraud and compliance discussion with credit unions over Zoom. If you would like to join our next meeting on Wednesday, December 21 at 9:00 am, please register here. These meetings will provide both the League and participating credit unions with ample opportunity to share fraud trends they are seeing.