Let’s Talk Fraud Recap #3: Let’s Talk Litigation & New Account Fraud

NAFCU Services Blog - What Your Credit Union Needs to Know About GAP Waivers in 2022

October 19, 2022 | Allied Solutions

With 2022 starting to wind down, fraud and litigation trends continue to wind up.

The third quarter of 2022 saw consistent activity with card-present and card-not-present fraud, amongst others, but welcomed a new trend to the list with digital wallet fraud.

Litigation trends are also a hot topic. Financial institutions are facing high-priced lawsuits, largely in part due to wrongful termination suits. Many wrongful termination lawsuits state race, religion, gender, ethnicity, age, or other protected class as the basis of the termination, while others are fighting back against “surprise” termination.

Termination should not be a surprise. When it comes to employee performance, communication and documentation are everything. To help mitigate your chances of a wrongful termination lawsuit, you should consider: 

  • Conducting annual performance reviews 
  • Provide ongoing feedback and coaching 
  • Have a clear and precise record of performance 
  • Have honest communications about deficiencies 
  • Express employee expectations 
  • Give employees direction to succeed 

 

In addition, overdraft class action lawsuits are also increasing. Discriminating eyes actively search for the omission of terms and/or ambiguous language to launch lawsuits alleging breach of contract. Some best practices to help stay off of a consumers attorney’s list include: 

  • Reviewing account agreement/disclosure to ensure it matches your practices and procedures 
  • Disclose the precise way fees are charged 
  • Subscribe and watch for Allied Solution’s Risk Alerts

 

Physical ATM/ITM attacks have been on the uprise since 2021. While free-standing machines are often targeted, it’s the drive-up machines that appear to be the most at risk. Once attacked, the institution can suffer significant losses, including machine damage, property damage, and the loss of the money itself.

New account fraud continues to be a bad actor’s best friend. Looking for institutions with weak controls, these bad actors will probe you with questions to determine their chances for success. Your main goal should be to prevent these bad actors from infiltrating your institution by always reviewing credit reports, training your frontline staff, and implementing knowledge identity questions, to name a few.


For more fraud prevention tactics, watch the latest Let’s Talk Fraud here.


The way bad actors commit fraudulent activity will continue to change as securities tighten and technology advances. Following some fraud prevention tactics will only help your institution and consumers in the long run and set you up to protect you from the bad guys.

 

 

About Allied Solutions

Allied Solutions, LLC is one of the largest providers of insurance, lending, and marketing products to financial institutions in the US. Allied Solutions uses technology-based products and services customized to meet the needs of over 4,000 banks and credit unions, along with a portfolio of innovative products and services from a wide variety of providers. Allied Solutions maintains several offices strategically located across the country and is a subsidiary of Securian Financial Group, Inc.

 



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Content in the blog posts are the opinion and views of the writer, and don't necessarily reflect the opinions or views of Allied Solutions.

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