Fraud Is Evolving, and so is the Credit Union Response

Insights from Melissa Pomeroy, CCUA's EVP and Chief Operating Officer

Technology is transforming the lending process, but the credit union difference remains rooted in people, trust, and purpose.

We spend a lot of time in this newsletter talking about innovation, including new technology, new partnerships, and new ways to serve members. This month, we are looking at the other side of innovation: the ways criminals are using many of those same advances to commit fraud faster, at greater scale, and with increasingly convincing tactics.

Unfortunately, fraudsters are innovators too.

The numbers are difficult to ignore. According to the Federal Trade Commission, consumers reported losing approximately $16 billion to fraud in 2025, a 25 percent increase from the prior year and the highest total on record. Imposter scams alone accounted for $3.5 billion in reported losses, with scams involving someone pretending to represent a financial institution among the most costly.

For credit unions, this is not an abstract national trend. Roughly half of the credit unions surveyed for a recent Cornerstone Advisors report experienced higher fraud losses in 2025, and most expect those losses to increase again in 2026.

The threats are coming from every direction: account takeovers, check fraud, synthetic identities, card fraud, social engineering, voice cloning, fake security alerts, and scams that convince members to authorize the payment themselves. In many cases, the member believes they are protecting their money when they are actually sending it directly to a criminal.

It is frustrating. It is expensive. Most importantly, it puts the trust between a credit union and its members at risk.

But this issue of Cooperative Connection is not intended to leave anyone feeling defeated. Quite the opposite.

The same innovation that allows fraudsters to move faster is also giving credit unions better tools to stop them. Identity verification has become more sophisticated. Transaction monitoring is becoming more intelligent and increasingly available in real time. Artificial intelligence can identify patterns across channels and transactions that would be difficult for an employee to recognize manually.

That said, while technology is absolutely essential, the human element still matters.  A credit union employee who knows a member, notices something unusual, and asks one more question can make all the difference. Technology can generate the alert. 

Relationships help credit unions know what to do with it.

That combination of smart technology, informed employees, educated members, shared intelligence, and trusted partners is where I see the greatest reason for optimism.

No credit union, regardless of size, should be expected to solve every aspect of fraud prevention alone. The good news is that a growing ecosystem of fintechs, CUSOs,  technology providers, and other industry partners is focused on this challenge. They are helping credit unions verify identities, monitor transactions, detect payment fraud, manage disputes, educate members, and respond more quickly as threats continue to change.  This month’s Cooperative Connection highlights several of those organizations and the expertise they bring to the fight against fraud. Their solutions may differ, but the objective is shared: protect members, preserve trust, and give credit union teams the tools and support they need to respond with confidence.

Fraud is not slowing down. Fortunately, neither is the credit union response.