Fraud-related Projects for 2019-2020

Have comments about these projects?

We’d love to hear your feedback, use the Comments Section below


Beginning in 2018 CU*Answers started on a multi-year project to drive a business plan goal to move from compliance monitoring to fraud prevention as an active feature of our network.  The focus is to make the most of our data-rich environment, on the way to building new tools and businesses that can help reduce and mitigate the effects of fraud for credit unions in our network.

Why should CU*Answers get in the fraud business? Because with the comprehensive data that’s concentrated within CU*BASE, we can gain a global perspective, across multiple channels, that other vendors just can’t get.  We can also look at people, not just transactions, for a more well-rounded view of who is causing (or being victimized by) fraud.  And since CU*BASE authorizes member transactions, we’re at the point of the request, which means we are in a unique position to stop fraud before it happens.

Projects for 2019-2020

We made significant investments in learning and foundation work in 2018 and will be releasing our first software tool in the 19.05 CU*BASE release.  Here’s a quick recap of projects in the works:

Project A: Gather the Data

Find out what fraud is actually occurring. This new database will give every network credit union a centralized place to log fraud incidents. We will then gather all of these stats to form a network-wide picture of fraud affecting our network. This picture will allow credit unions to begin building block lists (see projects B and C) to stop the bleeding on specific troubled members and accounts.  Then we’ll use our new knowledge of fraud patterns we see to build tools that stop those things from occurring in the first place (see projects D and E).

Status: Project #47270 is targeted for release with the 19.05 release.

Project B: Create Block Lists

Create lists of problem members and accounts. The idea here is to give credit unions a place to log member accounts where you’ve seen fraud in the past.  Block lists will be blunt instruments, in the sense that we’ll be able to look for a SSN/TIN in the list and stop a member from accessing a particular product or type of activity altogether.

This project will build the infrastructure to allow credit unions to enter the accounts and designate which products/services (things like P2P vs. bill pay vs. wire transfers, etc.) should block activity for that account. This will include both single-channel denial-of-service blocks that simply stop a member from enrolling or using a particular feature or service altogether, and multi-channel activity attribute blocks based on a particular data element, such as country of origin, merchant name, pay to name, etc., to stop specific transactions from occurring, across various delivery channels.

Block lists give us maximum flexibility to adjust and evolve these settings over time as we learn more about what fraud is actually happening in our network.

UPDATE: Denial-of-service block lists that will be included in this first project:

  • Bill Pay Enrollment Block List
  • Lending Block List (for this project, will present a warning to loan officers when loan apps are submitted by these members; in a future phase will prevent a member from receiving non-attended/auto-approved loan offers (1Click Offers/instant loans, CD-secured loans, etc.)
  • Online/Mobile Banking Activation Block List
  • P2P Enrollment Block List
  • Wire Transfers (Incoming) Block List
  • Wire Transfers (Outgoing) Block List

Transaction attribute block lists that will be included in this first project:

  • Country Block List (to prevent any account from posting a transaction (debit or credit) via any of the supported channels if associated with a particular country code.  First phase will include wire transfers only, future phases will add other channels where country codes are used.)
  • Pay To Block List (to prevent any account from posting a transaction (debit or credit) via any of the supported channels if associated with a particular pay to name. First phase will include AP Quick Checks and Misc CU Checks, Teller/Phone checks and money orders, Loan disbursement checks, and outgoing wire transfers. 

Status: Specs have been completed; waiting for availability of programmer resources.  

Project C: Stop Transactions for Accounts on the Block Lists

Test against block lists and stop actions from being taken.  Build new routines into various posting programs and interactive features to honor the settings configured on CU block lists. We already check for available funds or account freezes, now we’ll check against CU block lists at the same time.

For batch processes where there is already an exception mechanism in place, items can be stopped at the point of posting and funneled through the normal exceptions handling process.  In cases where there’s no batch exception process, we’ll need to adjust the specific program that either a member or a CU employee uses, either to present an error message, or prevent the account suffix from being selected or the particular feature from being launched in the first place.

UPDATE:  For the block lists described in Project B above, the following areas will be changed to check against the appropriate block list before allowing an enrollment or other transaction to be completed:

  • Changes to Personal Banker Features (for Bill Pay/P2P enrollment & OLB lists)
  • Changes to Online/Mobile Banking (for Bill Pay/P2P enrollment & OLB lists)
  • Changes to Wire Transfers (for the Wire Transfers & Pay To lists)
  • Changes to Process Member Loan Apps (for the Lending list)
  • Changes to Teller/Phone Checks and Money Orders (for the Pay To list)
  • Changes to Loan Disbursement Checks (for the Pay To list)
  • Changes to AP Quick Checks and Misc Expense Checks (for the Pay To list)

Status: Specs have been completed; waiting for availability of programmer resources.  

Project D: Create Tools to Configure Fraud Patterns

Look for specific patterns that signal fraud.  If block lists are blunt instruments, this project starts to build surgical scalpels to fine-tune which patterns of activity signify a possible fraud attempt. Flexible configurations will allow us to cover patterns related to velocity, product, out-of-the-ordinary activity, cross-channel activity, and idle activity fraud indicators.

Status: Still in the early design phase. 

Project E: Test Transactions and Stop Ones That Match Configured Fraud Patterns

Test against fraud patterns and stop incoming transactions before they post.  Build new routines to test activity against fraud pattern tests you’ve activated and automatically put accounts onto your block lists.

Status: Still in the early design phase. 

Other Future Project Ideas

Also on the drawing board are tools for flagging accounts as exceptions to the rule – an “unblock” for the block list, as it were.  And although we’re starting with transaction posting programs, we expect to eventually reach out to new account opening, applications, and other non-transactional processes.

Building New Businesses for Shared Execution

AuditLink Fraud Monitoring and Consulting Services

  • Starting in 2019 AuditLink experts will configure your CU*BASE Abnormal Activity Monitoring tools for FREE, or provide free consulting to credit unions who want to go it alone but need help getting started.  Visit the Store or contact AuditLink today!
  • Coming soon, AuditLink will begin offering new daily monitoring services to actually work the daily alerts this tool generates.  Beta CUs for the new service are being selected in February, and the new service will be announced at this year’s Leadership Conference in June.

Asterisk Intelligence Fraud Analysis Services

  • AI will also get into the act with consulting services around analyzing the fraud data you’ll be entering into your new database (see project A).  Our data analysts are experts at finding patterns and translating them into actions your credit union can take now.  Visit the Store or contact AI today!

Ultimately the goal is to build a community of users and use what we learn from those credit unions as well as vendors in the fraud space to help us build the new fraud pattern configurations (see project D above).  We hope you will join us.


Chefs for these recipes:  Jim Vilker and Keegan Daniel

Have thoughts or ideas about these changes? We’d love to hear your feedback. Use the Comment Section below.

May 23, 2019

Leave a Comment

* denotes required fields
  • (will not be published)

XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Visit the Kitchen Today for New Information on ACH Exception Processing Enhancements

Visit the Kitchen Today for New Information on ACH Exception Processing Enhancements

On May 9, 2019, a CU*Answers design team met to brainstorm ideas for changes to CU*BASE tools and processing routines.  Our main goal is to make it clearer to end-users how the tools work, including warnings about what to watch out for and tips for avoiding potential pitfalls. As a result of these preliminary conversations,… Read more »

May 14, 2019

Have you checked out the NCUA’s proposed 5300 Call Report changes?

Have you checked out the NCUA’s proposed 5300 Call Report changes?

Have you checked out the NCUA’s proposed 5300 Call Report changes yet?  The changes are targeted for March 2019, and the NCUA wants your feedback! The overall theme is modernization and simplification in order to reduce the reporting burden for credit unions.  Check out the 5300 Call Report Tools kitchen page for a highlight of… Read more »

Feb 15, 2018