Katie BaileyPatelco Credit Union recently reported that its Senior Advocate Program has prevented an estimated $9.6 million in potential fraud losses by identifying and intervening in suspicious transactions before members lost their money. The program relies on trained employees who recognize red flags, engage members in meaningful conversations, and escalate high-risk situations for additional review.
While many community credit unions may assume a dedicated fraud advocacy program is only feasible for large institutions, the core principles can be implemented at virtually any credit union, regardless of asset size.
Create a Frontline “Pause and Protect” Process
The most effective fraud prevention tool is often a well-trained employee empowered to ask one more question.
Develop a simple procedure requiring staff to pause and engage members whenever transactions involve common scam indicators, such as:
- Large cash withdrawals outside the member’s normal activity
- New or unusually large wire transfers
- Purchases of gift cards or cryptocurrency
- Requests to immediately transfer funds after receiving a phone call, text, or email
- Transactions involving government agencies, tech support, romance, investment, or grandparent scams
A brief conversation may reveal that the member is being manipulated by a fraudster.
Designate Fraud Champions
Instead of hiring dedicated senior advocates, designate one or two employees as Fraud Champions. These individuals receive additional fraud training, monitor emerging scams, answer staff questions, and assist with higher-risk situations.
Many credit unions already have employees with fraud investigation or Bank Secrecy Act (BSA) responsibilities who can serve in this role.
Develop an Escalation Checklist
Provide frontline employees with a simple checklist to determine when additional review is appropriate. Questions might include:
- Has the member previously conducted transactions like this?
- Is the member under pressure to complete the transaction immediately?
- Has anyone instructed the member not to discuss the transaction?
- Is the member unable to clearly explain the purpose of the transaction?
If multiple warning signs are present, require supervisory review before processing the transaction whenever legally permissible.
Strengthen Employee Training
Fraud trends evolve quickly. Consider incorporating five to ten minutes of fraud awareness into monthly staff meetings. Review current scams, discuss recent member experiences, and reinforce appropriate questions employees should ask.
Role playing real scenarios helps staff become comfortable having difficult conversations with members.
Encourage Trusted Contacts
For older or vulnerable members, encourage the use of trusted contacts where permitted by credit union policy and applicable law. While a trusted contact cannot transact on an account, they may provide an important resource if the credit union suspects financial exploitation or cannot reach the member.
Track Your Success
Even small credit unions should measure fraud prevention efforts. Consider tracking:
- Potential fraud losses prevented
- Number of suspicious transactions reviewed
- Fraud referrals from frontline staff
- Member education provided
- Fraud trends identified
These metrics demonstrate the value of employee vigilance and help justify future investments in fraud prevention.
Build a Culture of Prevention
Patelco’s program demonstrates that successful fraud prevention is not solely dependent on sophisticated technology. Their approach combines employee training, proactive intervention, collaboration between frontline staff and fraud specialists, and a commitment to protecting vulnerable members before losses occur.
Credit unions of every size can adopt these same principles. By empowering employees to recognize warning signs, ask thoughtful questions, and escalate suspicious activity, institutions can significantly reduce fraud losses while strengthening member trust. Sometimes, preventing fraud is simply a matter of giving employees permission to pause, ask, and protect.
