“Implementing a hotline is a critical part of setting the appropriate 'tone at the top,'” Travis Wilson, managing member of Fraud Hotline, said.

About 40% of all fraud is detected by tips, half of which come from employees, according to a study from the Association of Certified Fraud Examiners . The banking and financial services industry has by far the highest frequency of fraud, representing almost one in every five cases, and the median loss is $200,000, the study said.

“This partnership assists our credit union industry with implementing internal controls to help mitigate risk and protect themselves from potential losses at an affordable price,” Gall said.

When a credit union employee, volunteer or board member uses Fraud Hotline, the compliance officer at the credit union in question usually is notified within a day so that follow-up can begin right away, Gall said. “At a smaller credit union, that could be the supervisory committee. It could be the board of directors, whomever they put in charge of the conflicts of interest, confidentiality, all of those things at the credit union.”

The partnership with Fraud Hotline was years in the making, Gall added.

“It was a convenient way to apply all of the laws, the privacy laws for employees if you think of it that way, and give them that ability that if there were issues, misuse of property, conflicts of interest, whatever it might be, that they would have that ability to confidentially post it or let a third party know.”

According to the ACFE study, about 37% of the fraud in the banking and financial services industry was due to corruption. Fraud involving cash on hand accounted for another 19% while cash larceny and financial statement fraud made up another 13% and 10%, respectively.