Brand Impersonation on Credit Unions

Fraudsters increasingly target credit unions and their membership with online brand impersonation scams using phishing, smishing, vishing, spoofed mobile apps, and other techniques  – rising more than 200% over the past year according to Allure Security detection data. Account takeover, a result of online brand impersonation fraud, costs up to 11% of annual income according to Aberdeen Group.

Direct costs of financial account takeover include fraudulent account creation, transactions, and purchases – as well as investments in staff and technology to manage these incidents. Indirect costs add up as well including time spent by call center representatives investigating and resolving fraud, member churn, reduced member engagement, compliance fines and fees, heightened scrutiny from regulators, and reputational damage due to negative publicity, social media comments, and online reviews.

McKinsey & Company also reports that younger generations favor banks over credit unions, urging credit unions to improve their appeal to younger consumers to safeguard their financial futures. Reaching younger generations requires a strong, trusted presence on digital channels and high quality mobile and online banking experiences. Online brand impersonation erodes consumer trust in credit unions, deterring the opening of new accounts and discouraging the adoption of new digital services.