Digital Age Dangers: Emerging Fraud Risks for Credit Unions & Members in 2025

The digital age has ushered in remarkable advancements in technology, but at the same time it has armed fraudsters with sophisticated tools to exploit vulnerabilities. As we begin 2025, the fraud landscape is evolving at a rapid pace, presenting new challenges for credit unions and their members. To underscore this point, the FTC reported that consumers lost more than $10 billion to fraud in 2023, the first time losses have ever been so high.

Just as criminals are leveraging modern technology, businesses must do the same to stay ahead. Being proactive is crucial to defending against fraud threats, and implementing modern fraud prevention strategies is essential to mitigating future risks. To help businesses, including credit unions, anticipate emerging risks, Experian has released five key fraud predictions for 2025.

1. Crypto Highs and Lows

With the recent surge in the value of cryptocurrencies like Bitcoin, it's no surprise that fraudsters are getting more creative. Experian predicts that these criminals will be even more motivated to target both consumers and crypto providers to exploit this growth. They’ll use methods like investment and romance scams as well as set up fake websites selling bogus cryptocurrency to trick people who are eager to jump on the crypto bandwagon.

2. Pig Butchering Scams Get Meaty

Fraudsters are always looking to make off with as much money as they can, and pig butchering scams present the perfect opportunity to do so. In these scams, criminals "fatten up" their victims by enticing them into an investment scheme over time and then disappearing with the money, leaving their victims with a huge financial loss. This scam relies on the fraudster building a relationship and gaining the victim's trust so they can convince them to hand over their cash. While this type of scam isn't new, Experian predicts that criminals will get even better at it, finding faster and more convincing ways to trick people and stay under the radar for longer.

3. Is It a Social Media Challenge or a Crime?

Social media can be great for sharing viral products and life hacks, but it can also spread some dangerous trends. Last year, a check fraud scheme went viral where people filmed themselves writing bad checks, depositing them at ATMs and withdrawing cash before the checks bounced. Many of those involved may not have realized that they were committing check fraud by joining in. Experian predicts that we might see more of these trendy financial fraud schemes on social media with everyday people, not just seasoned criminals, getting involved.

4. Unhealthy Password Spraying

Health care companies hold a significant amount of personally identifiable information, making them prime targets for fraudsters. Experian forecasts that these criminals will use GenAI-created bots to launch large-scale password spraying attacks. This involves applying a list of commonly used passwords against a list of accounts to gain access to systems and sensitive data. Previously this was done by humans, but with advancements in technology, fraudsters can now conduct these attacks on a much larger scale. The use of GenAI makes these attacks exponentially larger, faster and more difficult to detect.

5. A New Generation of Bots up the Ante

Bot attacks are a well-known tactic used to commit a multitude of fraud schemes. A new generation of bots, called Gen4 bots, are built using AI tools and are trained to mimic human behavior, making them much harder to detect. Experian predicts that as Gen4 bot attacks become more prevalent, companies will need to use behavioral analytics as a standard practice to identify and combat this type of automated fraud.

Steps Credit Unions Can Take to Fight Fraud and Protect Members

While these predictions provide a glimpse at the year ahead, fraud is constantly evolving, so credit unions need to take proactive steps to safeguard themselves and their members from becoming victims not just now but also in the years to come. To do so, there are a few important steps they can take.

Work with a trusted partner: First, credit unions should work with a partner to implement an effective fraud prevention strategy for their business and ensure that they are prepared to detect and properly treat threats. The right partner can help them identify their strengths and weaknesses, put in place robust safety and security measures and provide ongoing support.
Lean on advanced technology: Next, they need to implement a fraud prevention strategy that can identify and mitigate all the different types of fraud. Leveraging advanced technology, like machine learning and AI, and taking a multilayered approach to fraud prevention is a non-negotiable.
Fortify authentication methods: Credit unions should also invest in multifactor authentication and technology like behavioral analytics, which can allow them to monitor and analyze real-time digital behavior in order to detect patterns and address fraud instantly without impacting their members’ experiences. This is important for maintaining trust with members as a recent Experian report found that 81% of consumers say they’re more trusting of businesses that can accomplish easy and accurate identification.
Focus on consumer and employee education: Finally, credit unions should prioritize educating their members and employees about fraud risks and safety measures. By leveraging their strong relationships with members, credit unions can ensure that individuals are well-informed and equipped to protect themselves. This not only helps prevent members from becoming victims but also builds trust and positions the credit union as a valuable and supportive resource. Employee education and implementing fraud-specific trainings can also help protect the credit union and the members it serves.

As fraudsters continue to develop more innovative tactics to target businesses and consumers, credit unions must stay prepared to outpace them. By working with trusted fraud prevention experts, implementing advanced fraud solutions, enhancing authentication methods and focusing on consumer and employee education, credit unions can put themselves in the best position to confidently combat fraud.

Staying informed about the latest threats and continuously adapting to new challenges will be essential for protecting their businesses from bad actors and maintaining a secure environment for their members, now and in the future.