Credit unions call members to verify transactions

by Center for Personal Finance editors

MADISON, Wis. (5/5/08)--The next time your phone rings, it could be your credit union calling. Some credit unions, such as Great Wisconsin CU, Madison, Wis., are using automated telephone systems to verify account activity to stem the tide of fraudulent transactions (Credit Union National Association Center for Personal Finance).

The calls from credit unions are triggered by suspicious activity that hits a member's account.

The past few years have seen a flurry of civil lawsuits (Heartland Institute May 1), legislative initiatives at the state level, and now federal legislation that would criminalizie pretexting--a technique crooks use by calling unsuspecting victims and attempting to gather personal information under false pretenses. So it's important to know the difference between a legitimate call from the credit union and a fraudulent call from a crook.

Here's what to expect if your credit union is using an automated system designed to protect you from fraud:

• Watch for notices. You may receive pamphlets or statement stuffers announcing that your credit union may contact you in case suspicious activity hits your account. If you haven't received any information, you may want to contact your credit union and ask what fail-safe system is in place.

• Anticipate verification requests. An automated telephone call to protect you from fraud will ask to verify activity and is only used to prevent potentially fraudulent activity from continuing. A legitimate call from your credit union may ask you to verify your identity by confirming only the last four digits of your Social Security number. It will never ask you to give out account information.

• Think personal touch. Instead of an automated call, you may receive a call from a staffer at your credit union if transactions on your account are deemed extremely suspicious. This happens in rare cases when a large number of suspicious transactions appears on your account, or you have several transactions originating in a foreign country known for fraudulent activity.

• Be suspicious. If you are the least bit suspicious that the phone call you've received is not from your credit union and the caller attempts to extract account information, hang up. Pretexting is a form of phishing, a technique criminals use to gather personal and financial information and extract money from your accounts (ftc.gov/). Immediately notify your credit union by calling or visiting a branch to inform credit union officials that you've received a suspicious call. That way you can be certain you are speaking with a credit union representative and you can verify your account activity.

Finally, be proactive in preventing fraud in the first place. Switch to online banking for 24/7 access to your accounts. Keep up-to-date with your transactions and account activity whether your credit union has an automated telephone notification system or not. That way you can protect your account by notifying your credit union if you spot a transaction that isn't legitimate.

Also, contact your credit union if you're taking a trip to a foreign country or expect to use your account for transactions you normally wouldn't initiate. This will help you and your credit union better protect your account.

For more information, read "Con Artists Switch From Phishing to Vishing" in Home & Family Finance Resource Center.


Printed Wednesday, July 9, 2008

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