A new alert from the NCUA reminds credit unions that those committing fraud often attempt to take advantage of opportunities made possible through new or expanded large government programs arising from emergency situations, such as the CARES Act, during the pandemic.
In a letter from Rodney Hood, NCUA chairman, credit unions are reminded that, although the CARES Act provides many ways for financial institutions to help members, it also creates opportunities for fraud.
The letter details the increased risks associated with routine operations, outlines red flags associated with common fraud schemes related to the CARES Act, provides references and avenues to report fraud or misconduct to the most appropriate authorities and also provides member education resources.
New account fraud, identity theft, cybersecurity risks, imposter and money mule schemes and mobile banking application fraud are all increasing as a result of the opportunities related to the ongoing COVID-19 pandemic, the letter states. Credit unions are encouraged to monitor agency websites that track evolving fraud trends, including:
- The Financial Crimes Enforcement Network;
- FBI’s Internet Crimes Complaint Center;
- FTC’s IdentitfyTheft.gov; and
- Department of Health and Human Services Office of the Inspector General.
The alert also reminds credit unions to be on the lookout for red flags associated with Paycheck Protection Program loans, Economic Injury Disaster loans, unemployment insurance benefits, IRS Employee Retention Credits and Credit for Sick and Family Leave.
Credit unions should contact the appropriate federal agency to report fraud, and file suspicious activity reports through FinCEN, the letter states.
The full letter can be accessed by clicking here.