Credit Union Fraud: Social Engineering Prevention

By: Ann Davidson, Vice President of Risk Consulting Allied Solutions.

Social engineering is defined as “the use of deception to manipulate individuals into divulging confidential or personal information that may be used for fraudulent purposes.” The use of telephone, email, postal mail and the internet are all vehicles that fraudsters use to steal your members’ personal information. However, online scams and phishing attempts are the most common ways in which fraudsters attempt to perform social engineering on your consumers so they can steal their information.

These member scams are likely to grow in amount and severity throughout 2018, primarily due to these key factors:

  1. More exposed records: 145.5 million U.S. records were exposed last year from the Equifax data breach alone. With that and other breaches taking place in 2017 (like Deloitte and Sonic Foods), you are looking at a consumer base that is at high risk of identity theft and fraud exposure this year.
  2. More sophisticated processes: The tools and processes used by criminals to perform these attacks will likely evolve and become more sophisticated in an effort to fall below the radar and have more success in their attempts. In fact, more and more fraudsters are treating these crimes like a business with hired employees and standardized processes.

Case in point: Recent reports have surfaced where scammers are contacting consumers as the Social Security Administration to trick them into giving up their personal information, which would then be used to perform identity fraud or synthetic identity fraud.

Take proactive measures to protect your business and your accounts from these social engineering fraud attempts. For an overview of the scams and frauds that hit your members the hardest watch our webinar on-demand today.

Social Engineering Fraud Prevention for Your Credit Union:

  • Monitor employees’ accounts to watch for any suspicious activity, especially those employees that have access to sensitive information.
  • Educate employees about ongoing threats.
  • Verify deposited checks clear before permitting a withdrawal or transfer.
  • Establish a multi-level authentication process for financial transactions or account change requests not performed in person.
  • Tell employees to never open or forward emails, links or attachments received from unknown sources.
  • Ask your employees to be wary of any prizes or offers made over the phone or through email, especially those that offer to update, correct or solve a computer issue or problem.
  • Encrypt private information prior to shredding or destroying documents or storage devices.
  • Conduct tests to determine where system vulnerabilities exist and promptly address them.
  • Monitor social media outlets to reduce the chance of sensitive information being posted.

Social Engineering Fraud Prevention for Your Members:

  • Be cautious of any company you choose to engage in business with.
  • Be cautious when asked to wire money.
  • Review your account statements frequently.
  • Consider giving only to established charities in the event of a disaster.
  • Always conduct your own research if someone contacts you with low-risk, high-return investment opportunities.
  • Be cautious when buying products online.
  • Use strong password protection.
  • Don’t respond to emails or messages to provide personal or financial information.
  • Report scam attempts:

If you take action NOW to proactively mitigate these fraud risks, you can protect your credit union and members from these attacks. Sign up for Allied’s Risk Alert newsletter to stay up-to-date about what’s happening in the fraud landscape.

Watch our most recent webinar “Sweetheart Scams, Phishing Attacks, and Member Fraud” to learn more about scams that hit your members the hardest. 

New Allied logoAllied Solutions is the NAFCU Services Preferred Partner for Insurance- Bond, Creditor Placed (CPI), Guaranteed Asset Protection (GAP), and Mechanical Breakdown Protection (MBP). More educational resources and partner contact information are available at

Tools to Boost Auto Lending

By Betty Seifu, Lending Program Manager, Allied Solutions.

A recent report released by the National Automobile Dealers Association predicted an increase in auto sales and leasing for a third straight year in 2017.[i]

With these car activities building momentum among consumers, there is an increased opportunity, and honestly, a need, for a strong game plan for scoring these potential auto loans.

Not only are you already competing with other financial institutions for loan opportunities, but now you’re also up against new players who have entered the field. Less traditional businesses like retail, mobile and peer-to-peer lenders are getting into the game to expand their services and attract new members.

This poses a threat to what credit unions have been seeing in terms of winning over auto lending consumers; many individuals are now looking for the best deal on the market no matter who is offering it to them.

Get ahead of your auto loan competition by building a strong lending program with unique and attractive consumer benefits.

Rewards Programs

Offering retail or cash rewards to borrowers who finance their vehicle through your institution is one way to draw in new auto loan business. One vendor surveyed participants of their auto rewards program and found that 95% of the respondents rated the program 5 out of 5 stars. In fact, this program vendor reports that their auto rewards program has increased their lending approval-to-book ratios as much as 90% on direct auto loans![ii]

Consumers are clearly very interested in auto loan rewards. And why wouldn’t they be? It is basically free money! These programs are likely to entice your consumers and generate a lot of new auto loan traffic for your institution, so why not sweeten the pot with multiple benefits for your borrowers?

Load up the bases so you can get that grand slam!

Cash Rebates

An independent study performed in 2016 by Aha! Online Consumer Research reinforced how much of a win-win complementary benefits really can be for lending institutions and businesses alike. More specifically, the study found that just about any individual presented with the opportunity to earn cash back would be interested in participating. In fact, 97.3% of consumers surveyed said they want their insurance company, employer or association to offer a cash back rewards program.

Much like a retail incentive in an auto rewards program, do not underestimate the value of a rebate check! According to this study, 82.6% of consumers surveyed prefer receiving a $500 check from their employer, insurance company or association over an offer of $1,000 off the price of a vehicle.

Take a look at the scoreboard: consumers want cash back, so offer them cash back!

One such cash-back rewards program offers a $500 rebate check to consumers leasing or purchasing a new vehicle from participating vehicle brands. This auto rebate program, called BonusDrive, is new, simple and quite attractive to consumers in the market for a car. In fact, BonusDrive is so new you may not even have been aware of its existence.

This puts you in pretty good field position considering that your competitors have likely not even heard of auto rebate programs, let alone thought about offering a program of their own.

By marketing this program to your consumers you place yourself at the top of the roster for financing when it comes time for your consumers to apply for an auto loan on their new car. Move to the top of the league today by adding unique auto loan benefits programs to your starting lineup. With the added bonus of being able to market and cross-promote these various programs, you will ensure that your credit union stays top of mind for consumers looking to choose an institution for their car buying and financing needs. Game over. The final scores are in and everyone wins!

Be sure to catch up on Allied Solutions’ recent auto loan podcast series to learn ways your credit union can take action today to better attract modern consumers, especially millennials. These podcasts address how to use market data to attract auto purchasers and utilize digital communication channels to invest in a stronger auto loan program.

Listen now: 

Building a Competitive Auto Loan Package: Go Big or Go Home

Understanding the Auto Market: Get Into the Minds of Millennial Buyers

New Allied logoAllied Solutions is the NAFCU Services Preferred Partner for Insurance- Bond, Creditor Placed (CPI), Guaranteed Asset Protection (GAP), and Mechanical Breakdown Protection (MBP). More educational resources and partner contact information are available at


[i] National Automobile Dealer’s Association

[ii] AutoLine Marketing Group


Understanding the Real Risk Associated with Uninsured Loan Collateral

By: Allied Solutions

Identifying, measuring, monitoring, and predicting risk in auto loan portfolios can be a serious challenge for financial institutions. Approaching this challenge while building borrower rapport can be a difficult balancing act. Therefore, having a risk-management program in place with a strong focus on avoiding financial losses, decreasing loan defaults, and improving the consumer experience is vital.

For lenders, it’s important to remember that no two borrowers are alike – and neither are their insurance or loan histories. A risk-management strategy should serve lenders and borrowers by accommodating a range of consumer lifestyles and preferences. Sophisticated analytical tools may help with this process by making it easier to forecast borrower insurance coverage and determine the likelihood that they will maintain outside insurance – ultimately providing you peace of mind and allowing you to channel your efforts accordingly!

An auto loan agreement isn’t just a shared understanding of loan requirements – it should establish a commitment between a lender and a borrower. Like with any successful relationship, effective communication is imperative. By implementing a risk-management strategy, like a Collateral Protection Insurance (CPI) program, you’re able to personalize interactions with your borrowers and position yourself as an invested stakeholder, willing to help protect both your interests and the interests of your borrower.

Risk Management Consultant at Allied Solutions, Cindy Bryant, suggests taking a conversational approach when communicating loan requirements to your borrowers in a way that terminology can be easily digested and understood. “Taking this approach may encourage your borrowers to maintain adequate insurance, thus preventing the need to add a CPI premium to the loan in the future.”

In her nearly 30 years of experience with CPI, Bryant has noticed a common theme for borrowers who become delinquent on their loans. “If a borrower’s vehicle incurs damages or is considered no longer drivable due to the damage, the borrower may lose motivation to continue paying for the vehicle and ignore payment notices.” Encouraging borrowers to maintain insurance that would cover the costs to repair damages would arguably reduce the likelihood of delinquency and promote a positive loan performance.

Using new technologies to help simplify this process is important to enhancing your member’s experience. Video marketing, for example, is a powerful way to provide personalized communication with your member and improve collaboration when it comes to verifying insurance. Bryant also recommends sending customized key messages to your borrowers early while insurance coverage is still top of mind.

There are many factors to consider when developing your risk-management strategies, and it is essential for your approach to keep your interests and the interests of your borrowers protected in order to improve borrower engagement and build long-lasting relationships.

To hear more about ‘Understanding the Real Risk Associated with Uninsured Loan Collateral’ listen to our two-part series podcast by Risk Management Consultant, Cindy Bryant.

‘Understanding the Real Risk Associated with Uninsured Loan Collateral. Part 1’

‘Understanding the Real Risk Associated with Uninsured Loan Collateral. Part 2’

Allied Solutions is the NAFCU Preferred Partner for Insurance—Bond, Creditor Placed (CPI), Guaranteed Asset Protection (GAP), and Mechanical Breakdown Protection (MBP); and rateGenius. Learn more at

Cyber Risk: What Your Employees Need to Know

By: Ann Davidson, VP of Risk Consulting, Allied Solutions 

Today, credit unions are doing a better job across the board enhancing their cyber risk management strategies to include more advanced risk controls.

However, one of the key risk controls that continue to be overlooked is employee education.  With the increase of the potential exposure to cybercriminal attacks, credit unions NEED to make employee risk education a top priority, so staff members at all levels of the organization can help your credit union detect and prevent future fraud risk exposures.

Regular risk training should be provided to employees in order to instill data security culture within the credit union. Employee risk education training should touch on:

  • Common cyber threats and security risks and the related vulnerabilities and threats to credit union operations, so employees understand the gravity of these potential breaches
  • Common warning signs for different types of fraud attempts so they know what to look out for and report
  • Workplace policies employees should follow to help prevent cybercrime, such as:
    • Internet & social media usage: Internet browsing should be limited ad social media usage should not be permitted while at work
    • Software usage: Employees should not install unlicensed software on any work device
    • Personal device usage: Employees should not use their personal computer, tablet, or mobile device while on your credit union’s network
    • Work device usage: Employees should not leave workplace devices unattended without securely locking them and should ensure virus protection software is kept current
    • Password usage: Employees should be required to use strong passwords that are unrelated to their personal information, and different for every secure account
    • Email usage: Employees should never respond to emails or open email links that look suspicious or are from unknown sources
  • The nature of data security and reminders that each employee is individually responsible for helping protect the credit union’s data
  • Legal and regulatory obligations to respect and protect the privacy of secure accountholder and credit union information
  • Procedure for incident reporting in the event a device being used on the credit union’s network becomes infected by a virus or is operating with unexplained errors, including the importance of common warning messages and alerts and who to report incidents to

Cybercrime is not going to go away anytime in the near future. That’s why it is critical that your credit union remain one step ahead of the cybercriminals by educating your employees about the part they need to play in protecting your credit union from these potential exposures.

Take a deeper look at cyber risk and send this informative webinar to your employees:  The Scary Truth About Cyber Risk and Fraud. This session will help your employees learn what they need to know to combat the growing risk of internal and external cyber risk that may impact your credit union and its members. The solutions presented in our webinar will help your financial institution get ahead of the curve and manage fraud risk in a strategic and proactive way.

Register here for Ann’s upcoming webinar on August 3 where she breaks down what the bad guys have been up to the first half of 2017, so you can see beyond the curtain and prepare for the latter half of the year. Fraud in 2017: What’s Hiding Behind the Curtain

Allied Solutions is the NAFCU Services Preferred Partner for Insurance- Bond, Creditor Placed (CPI), Guaranteed Asset Protection (GAP), and Mechanical Breakdown Protection (MBP). More educational resource

Creating a Collaborative Fraud Prevention Program

By: Ann Davidson, VP of Risk Consulting at Allied Solutions.

Many financial institutions in 2016 began picking up their efforts to build more robust risk management strategies. Creating a collaborative, cross-departmental risk strategy has proven to be a great way to manage fraud risk. Watch the full webinar to learn more: Collaboration is Key to Manage Fraud Risk.

One strategy your credit union may want to adopt is to create a risk culture awareness program that will help your financial institution better monitor, identify, and manage potential fraud activity.

What is a Risk Culture Awareness Program?

A risk culture awareness program is an ongoing initiative managed by leaders within your credit union to encourage enterprise-wide awareness of fraud and financial loss threats, so every member of your staff is better equipped to quickly and effectively detect and address these threats. Such programs include creating a fraud investigation unit to centralize the management of these risks, or adopting an enterprise risk management strategy that includes fraud mitigation.

What are the steps an organization should take to implement a risk culture awareness program?

1. Develop the foundational changes that will encourage this new culture of risk awareness.
2. Apply these new organizational changes and the risk culture awareness program.
3. Measure the impact of these changes to determine if they were effective.
4. Apply any necessary changes to the risk culture awareness program.
5. Adjust your risk culture awareness program as needed to meet the evolving needs of your organization and address current risks.

There is something to say about knowing your entire staff is doing their best to help ward-off fraud before it happens. There is also the added bonus of being able to tell your account holders all the hard work you are putting in to help keep their information and money protected – which will inevitably lead to good things for your organization. No matter where 2017 takes you, know that there is much to offer in the way of risk awareness and prevention.

Listen to a more in-depth discussion about how your compliance team and your risk management teams can work together to mitigate risk by watching the full webinar here: Collaboration is Key to Manage Fraud Risk 


Allied Solutions is the NAFCU Preferred Partner for Insurance—Bond, Creditor Placed (CPI), Guaranteed Asset Protection (GAP), and Mechanical Breakdown Protection (MBP); and rateGenius. Learn more at