Fraud is a big issue, but what are the actual numbers? Here are 7 eye-opening credit union fraud statistics that are sure to motivate you to take action.
Keep in mind that this isn't just big banks--this is ALL financial institutions, including credit unions, which are often targeted because there is a perception that they lag behind their competitors in terms of technology and cybersecurity.
This is according to the same study referenced above. Credit unions come in at 69%--second only to online lending or pure-play lending groups at 75%. Another study confirmed that this is a fraud rate increase of more than 70% in 2022 alone.
In 2022, it was estimated that about 43% of financial institutions that fell victim to fraud suffered losses between $500,001 and $1 million. Another 24% saw their losses rise to between $1 million and $10 million.
Out of all those who responded to a survey, just 5% say that they were able to recover every dollar they last to fraud. About 41% say they recovered between 51% and 75%. With a mere 9% managing to recoup just 1% to 25% of their losses, the possibility of a complete loss is significantly reduced, but these distressing figures must not be underestimated.
Due in large part to the COVID-19 pandemic, it shouldn't come as a surprise that one of the leading causes of financial fraud has been identity theft. In fact, it was estimated that there have been $43 billion in losses due to identity theft alone.
According to a report from TransUnion, synthetic identities have accumulated a staggering $4.6 billion in outstanding balances. These balances are comprised of personal and auto loans, as well as retail and other credit cards. This represents a significant surge from 2020 to 2022, with an impressive 27% increase.
Over the past five years, the NCUA Share Insurance Fund has suffered substantial losses, totaling hundreds of millions, as a result of fraudulent activities.
If you come across any fraudulent activities within your credit union, we urge you to use the following resources:
The sector you're in doesn't matter. No one is immune to the malicious intentions of fraudsters, and the damages caused by fraud are increasing year after year.
Therefore, it is up to credit unions to do more to keep their members' assets safe. Of course, they need to do this without harming the member experience, which is where solutions like Alloy—an identity-decisioning platform—can help. FLEX has recently partnered with Alloy to help credit unions both enhance member onboarding and to mitigate fraud risk. This collaboration enables your credit union to embrace the advantages of our digitally advanced financial landscape while minimizing any potential drawbacks.
Reach out to the FLEX team today for a conversation about Alloy or to dive deeper into your credit union's specific needs, such as FIS ID authentication. Otherwise, click the button below to learn more.