An identity fraud study released by Javelin Strategy & Research in February revealed that the identify fraud incident rate increased by 16% in 2016, a record high since the Stamford, Conn.-based consulting group began tracking identity fraud in 2003. The study also found that despite the efforts of the financial services industry, ID thieves managed to steal a whopping $16 billion.

"What I find fascinating about this program is that it leverages the shared branches because we are always stronger together," Karen Postma, SVP of fraud and contact center at CO-OP Financial Services, said. "The more we work together to mitigate some of this fraud, and bring these individuals to justice, the better off we're going to be as a movement."

Indeed, the Rancho Cucamonga, Calif.-based CUSO's shared branch network could prove to be a formidable and effective way for the industry to fight back against the rising tide of ID theft. Last month, CO-OP reported that it had 5,671 physical locations in the shared branch network, surpassing the 5,567 branch locations run by Chase Bank. Approximately 1,800 of the nation's 6,000 credit unions belong to CO-OP Shared Branch, a business unit of CO-OP Financial Services, which enables credit unions to promote branch convenience.

The idea of leveraging the shared branch network to fight and prevent fraud was developed after CO-OP began receiving information from branches about ID theft issues.

The purpose of the national fraud prevention program is to partner with credit unions in the shared branch network to gather the information of fraud incidents that occur in branches throughout the nation. Credit unions send CO-OP about half a dozen reports of fraud cases every month.

After they receive the fraud incident reports from branches, CO-OP analysts gather additional information about each incident and identify the suspects using branch surveillance images. All of that information is cross-referenced with other fraud incidents that occurred at other branches to determine whether suspects are hitting more than one branch. That information is compiled into a bulletin format with photos of the suspect and distributed to the branches.

CO-OP investigators also work with the U.S. Secret Service, Homeland Security officials and local police investigators to catch suspects.

In one recent case, for example, a law enforcement agency ran an ID theft suspect's image through its facial recognition system. What's more, law enforcement agencies will share crime intel with CO-OP's fraud team. The U.S. Secret Service recently discovered detailed instructions, authored by a convicted and incarcerated identify thief, on how to create a credit union member profile. The instructions had been scrolled on a writing pad discovered in a prison cell.

"In understanding the methods of operations of a fraudster, CO-OP can identity the typical information collected and by which means the information is collected," Postma said. "With this insight, CO-OP can educate credit unions on what typical information the fraudster either has or is looking for and utilize this information to strengthen their internal processes and procedures. Additionally, the credit union can educate members on appropriate safeguarding techniques. This allows the credit unions and their members to be one step ahead of the fraudster.

Typically, fraudsters will come into a credit union branch with fake IDs and have all of the necessary information such as Social Security numbers, date of birth and other information to get credit card cash advances, deposit bad checks and make cash withdrawal requests. Others will use their fake IDs to join the credit union and apply for loans or impersonate current members in account takeover fraud.

Last year, a Massachusetts fraud ring obtained account numbers and personally identifiable information for high-balance bank accounts, which included the names, addresses, dates of birth, Social Security numbers and sample signatures that the victim financial institutions used to identify and authenticate account holders. This account takeover fraud victimized six credit unions, a corporate credit union and 20 banks throughout the nation. From August 2013 to April 2016, the fraud ring gained access to nearly $4 million held in accounts and withdrew $2 million. Federal prosecutors said the crime ring recruited runners of the same gender and approximate age of these account holders to impersonate them when they went to branches to withdraw funds. They withdrew as much money as possible but would take out smaller amounts at several different branches in an effort to avoid detection of the scheme.

After reaching a low point in 2014, both account takeover incidents and losses rose notably in 2016, according to Javelin's research. Total account takeover losses reached $2.3 billion, a 61% increase from 2015 while account takeover incidents rose by 31%. Javelin said account takeover continues to be one of the most challenging fraud types for consumers with victims paying an average of $263 in out-of-pocket costs.

While CO-OP Shared Branch was not involved in the case, Postma noted one of the biggest trends is that fraudsters are targeting high net worth individuals. This type of information can be gleaned from social media sites such as LinkedIn, which lost 167 million account credentials in a 2016 data breach.

The recent Equifax breach is yet another troubling data breach, in part, because it means ID theft incidents are likely to increase.

Credit rating firm Equifax revealed a data breach exploited a website weakness to access the personal information, including credit card and Social Security numbers, of as many as 143 million Americans.

The Atlanta-based firm said it discovered on July 29 that hackers accessed certain files from mid-May through July, but waited until Sept. 7 after the stock market closed to warn consumers. The data included names, Social Security numbers, birth dates, home addresses, and in some cases, driver's license information.

Equifax also disclosed 209,000 credit card numbers, and other personally identifiable information on 182,000 consumers, might now be available to hackers.

"A lot of these non-card based data breaches are hugely impactful, and I think we're going to feel the effects of this (Equifax breach) for years to come," she said. "You can replace a card number, right? But you can't replace your Social Security number, or your birthdate, or your mother's maiden name. Those types of things just help perpetuate identity theft, and makes it harder to detect. I think credit unions really need some assistance with this type of fraud, and I think that's where CO-OP can definitely play a critical role."