By Lisa Hochgraf 
Alan White fields a question from an attendee of CUES School of Risk Management. White is president/CEO of Vital Insight, the strategic provider that powers CUES Enterprise Risk Management.
Before my fantastic vacation to Spain this June, I wired money to a friend who lives there and was willing to buy my family’s ferry boat tickets from mainland Spain to the Balearic Islands. (If you think you can do anything via the Web these days, try buying ferry tickets to Mallorca online. But that’s another post.)
Before I could wire the necessary $500 to my friend’s Spanish bank, I had to complete my credit union’s detailed form and fax over a copy of my driver’s license to prove my identity.
I could tell my credit union was being careful. But I never really thought about just how easy it could be for some fraudster to pretend they were me, send in the completed wire transfer request form and a copy of my driver’s license—and then wire away my money to their own bank account, set up for the purpose of receiving fraudulent transfers.
Until yesterday afternoon.
Fortunately, it’s not that I’ve been defrauded. Instead, I was listening to Joni Lovingood present to the 30-plus participants in CUES School of Risk Management, being held near Chicago this week. According to Lovingood, senior consultant/risk management at CUES Supplier member CUNA Mutual Group, Madison Wis., criminals have a fairly easy time defrauding members through wire transfers. She suggested the following practices to protect members from wire transfer fraud:
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Offer only face-to-face wires.
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Put a dollar limit on non-face-to-face wires.
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Set up a written wire agreement with a member’s first transfer request, executed face to face if possible.
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When members set up a wire transfer agreement, have them create passwords/passcodes that will then be required for future transfer requests.
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Similarly, create challenge questions within a member’s wire transfer agreement that can be used to verify the member’s identity when he or she makes a future wire request.
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Capture home, work and cell phone numbers with an initial in-person agreement setup, and complete a call-back verification on future requests.
I appreciate what credit unions do every day, helping folks like me manage their money. And my gratitude runs even deeper when I consider how thoughtful they have to be—and the great lengths to which they go—to make sure some fraudster doesn’t manage our money for us.
Lisa Hochgraf is a CUES editor.
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