Coping
With CNP
Fraud: Six
Tips
TINA OREM

torem@cutimes.com

year and a half ago, when the October 2015 EMV liability shift took place, another shift began — criminals started moving from card-present fraud to card-not-present fraud.

“When we look at 2016 over 2015, we see around a 33% increase in successful card-not-present fraud transactions,” said Kaleigh Simmons, who is director of marketing at the Chicago-based fraud analytics firm Rippleshot, which recently analyzed hundreds of millions of transactions over almost a full year of data from multiple card issuers.

“It sort of continues to bump up, month over month over month,” she said.

Card-not-present fraud is still a nagging problem for credit unions and other card issuers, but two pros in the trenches recently shared their tips for dealing with it in today’s post-EMV era.

Tip #1: Don’t get lazy. EMV may have stymied card-present fraud, but card-not-present fraud is rising and it may get worse before it gets better, Simmons warned.

“Occasionally, we talk to issuers who feel they don’t need to

PAYMENTS

Y18

he NCUA is embroiled
in a court battle with
CUMIS over its contro-
versial decision not
to pay a $3 million dollar fidel-
ity bond claim after a forensic
auditor determined a CEO’s em-
bezzlement scheme caused a loss
of more than $10 million that col-
lapsed a Little Falls, Minn., credit
union.

While this case has not been settled yet, legal and credit union experts say it can offer key takeaways for executives to protect their credit unions.

Moreover, related to this, the
NCUA v CUMIS legal dispute is a
civil lawsuit that the NCUA filed in
January against the former CEO of
the $51 million St. Francis Cam-
pus Credit Union, Margurite M.
Cofell. The lawsuit alleges that
the 60-year-old woman of Little
Falls, Minn., embezzled $2.8 mil-
lion over 15 years. However, Cofell
allegedly began stealing in the
mid-1990s from the credit union,
which led to a total loss that likely
exceeded $10 million, according
to a forensic auditor’s report filed
with the lawsuit.

Last month, a federal judge denied a summary judgement motion filed by CUMIS to rescind a $3 million fidelity bond claim policy agreement, which insured theft by employees. Both CUMIS and the NCUA have a May hearing

LEGAL

Battles Expose Fidelity Bond Issues

PETER STROZNIAK

pstrozniak@cutimes.com

Y17
FOCUSREPORT:
CUSOS

Shifting consumer attitudes, rising competition and more is motivating credit unions to leverage their assets. Learn how one CUSO’s credit card portfolio investment program allows them to do just that in this Focus Report. Y8

CULTURE

Consumer Experience Faced with increasingly commoditized markets, more and more insurance and financial providers are launching customer experience improvement programs to differentiate themselves.

However, there’s something many of these companies don’t yet realize: The vast majority of their programs will fail.

In a survey of more than 1,000 companies by communications provider Avaya, an astounding 81% indicated that their customer experience improvement programs had failed to deliver results.

Attention & Funding Needed Those are a lot of companies wasting a lot of time and a lot of money on something that isn’t working.

What’s worse, given how these failures typically play out, companies end up losing more than just their investment in a better customer experience. They lose credibility — in the eyes of their employees and potentially even their members.

Launched with great fanfare, most of these programs are left to die a slow death, starved for funding and attention. What remains strong is the signal that sends to their workforce — con-firming the staff’s suspicions that customer experience really wasn’t that important to the company. These programs become yet another casualty in the long line of corporate transformational changes that, in Y16 Must Reads