Holiday Scams and Fraud Prevention: What Credit Unions Are Doing to Protect Members

The holiday season is a prime time for fraud, with scammers targeting everything from online shopping to unsuspecting seniors. In 2023, holiday-related scams cost U.S. consumers over $500 million, and Virginia credit unions are stepping up to ensure their members don’t become part of that statistic. By understanding emerging fraud trends and tailoring solutions to their size and resources, credit unions can keep their communities safe this holiday season.

Emerging Fraud Trends in 2024

Understanding the evolving landscape of fraud is essential for effective prevention. Here are some notable trends observed in 2024:

• AI-Powered Scams: Scammers are using tools like ChatGPT to generate highly convincing phishing emails, fake websites, and other fraudulent content. According to Forbes, AI-driven phishing attempts have increased by 135% in 2024.

• Deepfake Technology: Fraudsters are leveraging AI to create deep fake voices and videos, making impersonation scams more convincing than ever. In a recent case cited by CNN, a scammer used AI to mimic a CEO’s voice and steal $35 million.

• Online Shopping Frauds: Fake e-commerce sites surge during the holidays, with the Federal Trade Commission (FTC) reporting a 30% increase in online shopping scams last year alone. These scams are often disguised as deals on popular items, tricking consumers into sharing payment details.

Innovative Strategies Adopted by Virginia Credit Unions

Credit unions across Virginia have implemented various measures to protect their members from these sophisticated scams. Here are some notable examples:

• Education Initiatives: UVA Community Credit Union offers a comprehensive Fraud Resource Center, providing valuable information on various types of fraud to help members stay informed and vigilant. 

• Biometric Authentication: Virginia Credit Union has implemented VACU Voice ID, a voice biometrics technology that authenticates members by the unique characteristics of their voice, enhancing security during call center interactions. 

• Fraud Detection Systems: Langley Federal Credit Union partners with ID360 to provide multi-layer protection for its members against identity theft. Members gain access to services like 24/7 credit monitoring, annual identity checkups, and a range of tools to detect and recover from fraud. As an added benefit, Langley members receive discounted rates for these services, ensuring affordable, comprehensive security. ?
   

Holiday-Specific Scams: What Credit Unions Can Do

Credit unions can take targeted steps to address scams that are particularly common during the holidays:

• Fake Charity Scams:  Scammers often pose as charities during the holiday season. The FTC warns consumers to look for red flags, such as unsolicited donation requests or pressure to donate immediately. Credit unions can share tips with members on verifying legitimate charities, such as using Charity Navigator.

• Gift Card Scams: According to the AARP, scammers often pressure victims to pay debts or fees using gift cards. Credit unions can educate members by emphasizing that no legitimate business or organization will demand payment in gift cards.

• Online Shopping Scams: Encourage members to verify websites before entering payment information. Highlighting security features like HTTPS encryption and providing examples of scam warning signs can help prevent members from falling victim.
   

Fighting Fraud All Season Long

The holidays should be about celebrating, not worrying about scams. While fraudsters are always finding new ways to target consumers, credit unions are working just as hard to protect their members. From advanced security tools to practical education, credit unions are giving their communities the resources they need to outsmart scammers and enjoy the season with confidence.

Here’s to a safe, secure, and joyful holiday season from all of us at the Virginia Credit Union League!