DENVER—First-party fraud is growing rapidly, says Velera, which shared data during VeleraLIVE here that reveals this crime a growing concern among credit unions.
As CUToday.info reported, at its annual conference Tuesday Velera introduced a new, tiered fraud service model approach to meet credit unions where they are in their risk mitigation journey, providing them with tailored offerings to accommodate individual needs.
The new Risk Mitigation Model consists of three tiers: Essential, Premier and Enhanced Risk Mitigation Services, each of which build upon the offerings of the previous tier. Essential is the foundation of Velera’s fraud services offering, providing an organization with 365-coverage, insight on fraud trends and daily support according to financial institution needs. This level also features the establishment of global rules, along with testing, deployment and ongoing optimizations, explained Karen Postma, SVP, risk solutions at Velera.
During the conference, Postma told CUToday.info that credit unions’ fraud and risk needs are changing, and vary greatly.
“The number of credit unions that vary in size and membership, and even scalability is great,” she said. So, what credit unions need when it comes to fraud and risk support varies widely, as well. We have some credit unions that are very independent. We have others that maybe need us a little. And then some that need a great deal of our help.”
Postma said the new Risk Mitigation Model helps the CUSO find more opportunities to assist credit unions in the fraud fight.
Very Favorable Response
Postma said attendees at VeleraLIVE have responded favorably to the new offering.
“We have seen a great deal of interest at our trade show booth and talked to a lot of credit union executives,” Postma said.
Postma added that combining the Co-Op and PSCU organizations helped drive the new model.
“We had different service models and had great success with both. Being able to bring them together felt like a very natural opportunity for us,” she said.
Postma said in the Risk Mitigation Model’s top tier—the enhanced service model—what has been most appealing to credit unions is the fact there is a component dedicated to reviewing cases for first-party fraud. Postma said recent data show Velera members are benchmarking that anywhere from 50% to 80% of their totality of fraud is first-party.
“I don't necessarily want to say this is a trend, but maybe consumers either knowingly or unknowingly are reporting fraud when it isn't,” she said. “The impact that is having broadly on our credit unions is massive. So, to be able to have an option for a service model that specifically addresses this and helps our credit unions with some of those investigations, I think it's part of the reason we've seen such a high interest in some of those top-tier service levels.