April News & Views Published Below

CU SECURITY & TECHNOLOGY News - Providing a brief summary of news and information related to security and technology issues for credit unions - Plus some interesting and fun web sites.

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https://www.cunews.com/infosec.htm

Risk expert: E-fraud advances require new techniques

Credit unions, their members and third-party providers of electronic funds transfer services need to improve their online security because of advances in online fraud involving personal and financial institutions computer systems, a CUNA Mutual Group risk management expert said Friday.

Electronic fraud losses are caused primarily by consumer account compromises through online banking systems and system intrusions at third-party providers of electronic services, Ken Otsuka, risk manager, told attendees at the Hawaii Credit Union League 71st Annual Convention.

Ken Otsuka, risk manager with CUNA Mutual Group, discusses electronic fraud with attendees at the Hawaii Credit Union League 71st Annual Convention Friday. Phishing scams have become a mainstream activity for fraudsters," Otsuka said. "Consumers continue to be duped by this e-mail scam and provide their account numbers and online banking passwords." Account compromises occur when members respond to phishing e-mails by clicking on embedded links that take them to bogus Web sites imitating the credit union's site.

"The branding is remarkably good, and consumers are fooled" into providing information that would allow fraudsters to open accounts with the victim's information," he said.

Read More at: http://www.cuna.org/newsnow/09/system042709-5.html?ref=hed

When you fall, how will you get back up?

We all fall at some point in our lives. A new business or product that we thought would be the next winner, turns out to be a disaster. Failure happens.

If we don't fail, we're probably not trying hard enough.

But what separates the great business leaders from the "also-rans" is how they respond to the times when they fall flat on their face.

Nick Vujicic is someone who constantly falls. And it should be impossible for him to get back up. But he does. It's an incredible story that you've got to see for yourself, especially in this tough economy. You'll be glad you did.

An incredible story.
http://www.yourbusinessgps.com/main.asp?column=1115&page=1342

Survey of Experts Finds Increase in Fraud During Economic Crisis

Intense financial pressure during the economic crisis has led to an increase of fraud, according to a survey of fraud experts conducted by the Association of Certified Fraud Examiners (ACFE). Results of the survey, published in the new ACFE report "Occupational Fraud: A Study of the Impact of an Economic Recession," also found that layoffs are pervasive and are leaving holes in organizations' internal control systems.

The survey responses of more than 500 randomly selected Certified Fraud Examiners (CFEs) were compiled by the Austin, Texas–based ACFE, the world’s largest anti-fraud organization and premier provider of anti-fraud training and education. CFEs are experts in fraud detection, prevention and deterrence, and must pass a rigorous exam as well as meet high professional, educational and ethical standards.

Read more at: http://www.earthtimes.org/articles/show/acfe-survey-of-experts-finds-increase-in-fraud-during-economic-crisis,788078.shtml

Dash ATM Expands Product Line to Better Serve U.S. Credit Unions

Recognizing the need to provide credit unions and other financial institutions with a single source for safe secure and reliable ATM products and services, Dash ATM, the nation’s leading manufacturer of high security environmentally controlled drive-up and walk-up ATM enclosures and kiosks, announced that the company will begin marketing state-of-the-art ATMs manufactured by Triton and Hyosung, two of the world’s largest and most respected ATM manufacturers.

Dash ATM will be the only kiosk manufacturing company in the US that can provide financial institutions with a full turn-key operation for a new ATM, a safe/secure enclosure and even take care of installation and first and second line maintenance service.

Established nearly 10 years ago, DASH ATM manufactures environmentally controlled drive-up and walk-up ATM enclosures for machines which are not equipped with level 1 safes. To date, no criminal has ever gained entry into a DASH manufactured enclosure. For more information on Dash ATM visit http://www.dashatm.com/.

Vendor partnerships key to fighting fraud

Credit unions plan to increase their efforts to fight fraud, and vendors should work on creating strategic partnerships to present more complete solutions, according to a recent study.

Fraud is a serious concern for financial institutions, and credit unions spend millions of dollars each year on solutions to prevent attacks, Boston-based Aite said in its new report, "Fraud Management at Retail Banks and Credit Unions: The Vendor Landscape."

"The sheer number of fraud management vendors used by financial institutions speaks to a lack of ability for any one vendor to address the gamut of fraud management needs," said Nick Holland, senior analyst with Aite Group and author of the report.

"Vendors looking at the fraud management landscape for financial institutions should realize that institutions are likely to gravitate to vendors that can provide fewer touchpoints to the overall fraud picture. Vendors should explore strategic partnerships in order to present a more complete offering," he added.

The report is based on a November 2008 survey of executives at 23 of the top 150 U.S. financial institutions. It reveals financial institutions' perceptions of fraud management technology vendors and ranks vendors in four areas: new account opening fraud detection, ID verification, authentication and ID fraud monitoring; fraud database; enterprise fraud case management; and check fraud detection.

Warn members about skimmers, 'Grandma, it's me' scams

Credit unions may want to warn their members about two types of scams circulating recently: ATM skimmers and scammers preying on older consumers by posing as a grandchild in trouble.
ATM skimmers, which are attached to ATMs or terminals to read unsuspecting consumers' card data as they use the machines, have seen attention the past two weeks.

Skimmers at three JPMorgan Chase & Co. ATMs--two Chase-branded ones in New York and a Washington Mutual-banded one in West Hollywood, Calif.--were discovered and reported by consumers using the machines (American Banker April 15).

The Chase-branded skimmers mimicked the translucent green material used to make the card slot in the NCR Corp. machines. The one in the WaMu machine was made from opaque gray plastic.

Since the cardholder's data personal identification number (PIN) isn't stored in the card's magnetic stripe, the skimmer must be paired with a camera on or near the ATM to record the numbers the consumer types on the keypad. One consumer, who didn't spot the skimmer until his card snagged on it, found a camera behind a mirror stuck on the ATM (Bank Technology News April 13).

The latest scam circulating in Ohio is the "Grandma, it's me" scam, says the Ohio Credit Union League (eLumination Newsletter April 15.

Scammers call unsuspecting seniors and in a highly excited or anxious voice say, "Hi Grandma/Grandpa, it's me." The senior will reply with the name of their grandchild (for example, "Oh, Johnny, what's wrong?") The scammers pick up on whatever name the victim uses and pretend to be a grandson. The "grandson" claims to be in trouble and needs money wired immediately to bail him out of jail or for a hospital bill.

"This is a financially and emotionally devastating scam and has occurred throughout Ohio," said the league. "Routinely educate your staff and members about circulating scams to avoid others falling victim."

Palm Scan May Replace Log-on Passwords

Be patient. Large file is loading.

Forget your password? Don't worry about it. A scan of your hand, palm, fingerprint or face will someday replace it. Hundreds of credit unions across the country are using biometric identifcation technology to identify employees. Here's an example of one of these technologies.

Fake CU also prompts alerts in Pennsylvania

HARRISBURG, Pa. (4/13/09)--The Pennsylvania Department of Banking has issued a consumer scam alert about an entity calling itself "First Star Lending Services" and "First Star Credit Union," believed to be the same entity that received a cease-and-desist order from a Michigan regulator last week.

The Pennsylvania department warned about an apparent advance fee loan scam using the names at www.firststarlendingservices.com.

Two consumers said they applied to the company for loans ranging from $7,000 to $10,000. When they were asked to pay several hundred dollars in upfront fees to receive their loans, they became suspicious and did not send any funds.

The companies claim to be located at 1800 Loucks Rd., Suite 850, York, Pa. However, no such address exists there. First Star Lending Services claims to offer first and second mortgages, consumer loans and other financial products, but it is not licensed by the Pennsylvania Department of Banking. There is no First Star CU chartered by state or federal regulators said the department.

News Now reported that the Michigan Office of Financial and Insurance Regulation issued a cease-and-desist order against a fake credit union, "Firststar CU," claiming to be a Pennsylvania-based credit union. OFIR said the institution is a fraudulent financial institution (News Now April 10).

US banks sign up for biometric project

The US-based Financial Services Technology Consortium has launched a project to investigate the use of biometrics for verifying customer IDs. The FSTC says over 20 banks have expressed an interest in the project, including the American Bankers Association which has signed on as a sponsor.

Dan Schutzer, executive director FSTC says the programm will endeavour to develop a methodology for banks to better select, specify, evaluate and deploy biometric applications with greater customer acceptance.

"We also hope to identify and validate at least one or two of them that will make an immediate impact in the fight against identity theft and insider fraud," he adds.

The initiative grew out of a panel discussion at a joint FSTC/Bits summit in early March. A follow-up meeting is planned for later this month at Wells Fargo Bank in San Francisco.

A global survey conducted by Unisys last year found that 72% of US citizens would be willing to undergo fingerprint scans to verify their identities when dealing with banks and government organisations.