Risk Alert: Corporate Check Fraud

CrossState recently heard from New Directions Community Credit Union that they have fallen victim to corporate check fraud, receiving at least two calls requesting verification for three fraudulent checks. Fortunately, they avoided substantial harm due to their tools and procedures, showcasing the importance of such safeguards.

Primarily, they utilize services from Vizo Financial that notifies them of potential issues with a check and their accountant reviews their bank account regularly to make sure the checks that are clearing are all legitimate. After the fraud incident, they also reached out to their bonding company to make them aware of the situation.

Protecting Your Credit Union & Members

With scams in general on the rise, this is a reminder to develop and implement risk mitigation procedures to help keep your credit union and members safe. This includes:

• Training front-line staff on spotting counterfeit checks and forgeries
• Performing periodic trainings and audits
• Implementing a validation process
• Placing check holds on check deposits
• Reviewing a member’s account to help identify unusual deposits
• Reconciling the corporate checking account daily

In addition, take advantage of InfoSight360, a free member resource! You can find TruStage RISK Alerts under the “Resources” section and information on check fraud under the “Fraud” channel.

Further, if you do discover your corporate check account has been fraudulently used, you can report it to TruStage (if you are a bond client) or the insurer you use as well as CrossState. This will help spread awareness for your fellow credit unions.

As always, if you have any questions or concerns about corporate check fraud or other issues, contact our Compliance Hotline by email or phone at 800-932-0661 (option 3)!