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Michigan Credit Union League

Phone Banking Fraud in Detroit Area

Several credit unions in the Detroit area (Novi, Clawson, Royal Oak are known, currently) have experienced what appears to be a coordinated effort to defraud the credit union and/or its members by making fraudulent transfers via the phone banking system.

The full details are still unknown, but the mechanics of this operation appear to involve the creation of a new account (with fraudulent I.D.), using the phone banking system to transfer funds from a target account and into the newly-created fraudulent account, and then withdrawing the funds either in-branch or at an ATM. It appears that these phone transfers are all being made from the same number: 586-823-2184

Note that this fraud appears to be coordinated. One credit union noted that five new accounts had been opened that appear to be connected to this activity. Also note that, because they are using fake ID’s and information, they may not pass ChexSystems; however, the fraudsters are changing their clothes, donning wigs/glasses and trying again with fresh false information. To our knowledge, at least three credit unions have experienced this activity in the last week.

Importantly, this attack appears to be relatively low-tech, perhaps in an attempt to evade detection. One credit union noted that most of their fraud occurs online, so this method wasn’t anticipated. It does not appear that the phone system, itself, makes a difference – this attack has worked on at least two separate phone banking systems.

How the fraudsters obtained the information necessary to make the fraudulent loan transfers is still unknown. Be on the lookout for possible social engineering efforts. If your phone banking system does not require calling from an account-linked phone number, you may be at greater risk.

If you have seen this in your own credit union and have additional information to share, please contact MCUL Director of Compliance & Regulatory Affairs Brad Willett.

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2022-06-22 00:00:00