The Decisive Actions CUs Make During the Pandemic Can Help Protect Their Members

When many credit unions were figuring out how to protect their institutions and survive during the COVID-19 pandemic of 2020, several credit unions decided to take decisive action to support the members outside of their institutions’ walls. With the pandemic creating a perfect storm of vulnerability for many members, especially older members, it was apparent that everyone was facing an avalanche of attacks.

Some credit unions have boldly stepped up their commitment to help members in this unique and unprecedented time by providing them with services that protect against the tidal wave of identity theft and fraud building around them. Members saw these highly effective and protective services, which were included with their checking accounts for just a nominal monthly fee, as an added value from their credit union. Typically, these new protective services’ retail value was worth at least 10 times more than the account level fee, which resulted in member acceptance rates of over 90% – thus generating non-interest income as well.

With more ID fraud and theft happening outside of credit and finances, these services were just what members needed to stay protected against all forms of cyber assaults from hackers and other ID thieves. Dark web monitoring and fully managed ID theft recovery services included in these strategic services to members also assured the members of an ultimate safety net against any form of ID theft or fraud – financial or non-financial. The amount of COVID-19 related scams, schemes and fraud that took place in 2020 was beyond anyone’s imagination. So these special actions by credit unions were well received by members as powerful tools for defending their identities.

Unfortunately, 2021 is not forecast to be any better. The Experian Data Breach Forecast predicts that this will be the year of the “cyber-demic.” It is hard to believe that 2021 could surpass the horrific ID fraud losses seen in 2020. Leading up to the start of the pandemic, the annual recorded consumer ID fraud loss was $13 billion. By the end of 2020, the figure had more than tripled to a record of $43 billion.  And according to the 2021 Javelin Strategy & Research Report, the total combined consumer and business fraud loss in the country was $56 billion, demonstrating how consumers (your members) faced a double dose of physical and financial harm during the pandemic.

Credit unions that implemented protective ID programs in 2020 also positioned their members for a defense against 2021’s continuation of the same potential attacks and more. Your members are already facing a massive amount of unemployment benefits fraud. Consumers experienced a $63 billion loss due to fraudulent unemployment claims in 2020, and if things don’t change, 2021 is trending toward a nationwide loss of $300 billion, according to an NBC report. In addition, the ID Theft Resource Center already calculates that the first quarter of 2021 saw a 564% increase over the fourth quarter of 2020 for breached records – and that does not include the announcement from early April 2021 from CyberNews researchers that 500 million LinkedIn users were breached.

In mid-March 2021, the FBI issued a statement on the sharp rise in phishing scams, and the statistics showed that consumers (again, your members) still need to be made aware of these attacks. Each time a credit union implements a protective ID program, it also provides thorough education and awareness. This action is critical to ensure that members fully understand the dangers they face from some very sophisticated criminals and to fully appreciate the protection they now receive from their credit union.

With a recent report by Canalys showing that more data records were breached in the past 12 months than in all the previous 15 years combined, it is clear that the cyber-demic is in full force. And, unfortunately, it will continue, according to all major predictors. So, at what point does it make sense to implement the kind of protective services your members need in these times of heightened risks? Clearly, members are willing to accept and appreciate these services when presented with a robust value proposition from their credit union. And clearly, these are the kind of services that set credit unions apart from other financial institutions – they show credit unions are willing to go the extra mile for their members.

James McCabe is EVP for Vero in Scottsdale, Ariz.