ATLANTA— For credit unions, fraud is no longer just a line item—it’s a multiplying threat. Each dollar lost now carries more than $5 in added costs, from compliance and operations to reputational damage, according to the new LexisNexis True Cost of Fraud Study 2025.
The report highlights that fraud drains resources well beyond the initial loss. With thinner margins than big banks, credit unions are feeling the squeeze most acutely, even as many still rely on manual defenses against increasingly sophisticated schemes.
Despite rising threats from bots, scams, and other sophisticated schemes, 44% of U.S. and Canadian financial institutions still rely heavily on manual tools. LexisNexis Risk Solutions warned that hesitation to adopt automation and AI leaves many credit unions vulnerable at a time when fraud tactics are becoming faster and more complex.
“Since 2021, the LexisNexis Fraud Multiplier has surged 25%—from $4 to $5 per dollar of fraud—underscoring the growing financial burden institutions must absorb as they balance prevention, compliance, and member service,” LexisNexis said.
FIs highlight fraud vulnerabilities at every stage of the customer journey. Among U.S. financial services firms, 30% of fraud is found at new account creation, 31% occurring within transaction activity and 39% during account login or access, LexisNexis explained.
Many organizations, LexisNexis said, fail to track fraud comprehensively, leading to underestimated losses.
“Only 45% of FIs track fraud across both payment methods and transaction channels. Another 25% track it only across transaction channels, while 28% focus solely on payment methods,” the company said.
Nearly half of FIs (44%) rely mostly or entirely on manual processes, while only 20% are mostly or fully automated. As fraud becomes more advanced, FIs that avoid modernizing with automation and AI risk falling behind in prevention and customer protection, the data show, according to LexisNexis.
“Fraud is a dynamic, escalating threat that touches every corner of an FI’s operations. However, FIs don’t need simply accept it as a cost of doing business,” said Kimberly Sutherland, global head of fraud and identity at LexisNexis Risk Solutions. “Our latest study reveals that as fraud losses climb, many organizations still depend on manual processes that fail to match today’s sophisticated attacks. Leading FIs with the lowest fraud costs adopt automation, AI and cross-channel visibility to detect more fraud faster through a multi-layered approach. Importantly, they attain this while preserving the experience for genuine customers.”
Key findings:
- Scams pose an increasing threat to FIs. Scams cause 38% of total fraud losses for U.S. lenders and 36% of overall fraud losses across all Fis.
- Malicious bots present a mounting threat to financial institutions. Forty-four percent identify bots as a major hurdle in verifying customer identities online and via mobile channels, while 48% report a rise in monthly bot attacks over the past year.
- Mobile fraud represents a major risk, accounting for over a third of total fraud losses across FIs. U.S. FIs are the most vulnerable, with mobile fraud increasing in financial services while remaining steady or slightly declining among lenders. Seventy percent (70%) of US organizations reported mobile fraud increased at least 10% in the last 12 months.
- Fraud controls have led to increased customer attrition for many North American institutions. Over the past 12 months, 71% of U.S. lenders and 78% of Canadian lenders reported higher customer churn due to fraud prevention strategies. Balancing robust protection with a lower friction for trusted customers remains a critical challenge, LexisNexis said.
- Fraud-mature organizations take a proactive approach to tracking fraud and invest in future prevention. “This strategy strengthened defenses and reduced customer churn by 29% over the past year for those using mostly or fully automated systems. Fraud-mature organizations consistently report better outcomes in reducing churn and stopping fraud,” LexisNexis explained.
Methodology: LexisNexis Risk Solutions commissioned KS&R to conduct a survey of 507 risk and fraud executives in Financial Services and Lending organizations in the U.S. (423) and Canada (84) in April and May 2025. Data collection and survey questions reference a 12-month period.
Download the LexisNexis® True Cost of Fraud™ Study 2025 North America.