ECCU Blog

“Your account appears to have an unauthorized transaction. To ensure that your account is not compromised, please click the link below and confirm your identity.”

Sound familiar? That message is from a recent phishing attempt I received via email. In the act of phishing, Internet fraudsters send spam or pop-up messages in hopes of gaining access to your personal information (credit card numbers, bank account information, Social Security numbers, passwords, or other sensitive information). The email looks official and raises concern and may even threaten dire consequences if you do not respond. They include a link to a website that looks official, but isn’t, and captures any personal information you enter so they may steal your identity. 

Now, the same type of scam is finding its way to you via your cellular phone. In a smishing attempt, identity thieves send a similar message to your mobile phone using an SMS text. The text relays that an urgent matter needs to be discussed and provides a toll free number where a fake automated voice-response system records account number and password information. Smishing relies on the tendency for individuals to be more trusting of text messages than email messages. 

In a world where fraudsters are looking for any opportunity to gain access to our private information, how do we defend ourselves? The American Bankers Association suggests financial institutions share tips and remind customers that socially engineered schemes rely on methods financial institution would never employ.

They state,

“To avoid fraud, banks and credit unions should remind customers to”:

• Never give out personal or financial information in response to an unsolicited phone call, fax, e-mail or text.
• Contact the financial institution to confirm the legitimacy of any e-mail that asks for the submission of personal or banking account information.
• Check credit card and bank account statements regularly for unauthorized transactions…even small ones.
• Make sure websites are secure when submitting financial information online. Check for padlocks or key icons at the bottoms of Internet browsers. Most secure Web addresses also use “https.”
• Report suspicious activity to the Internet Crime Complaint Center, a partnership between the Federal Bureau of Investigation and the National White Collar Crime Center.
• Contact your financial institution immediately if a phishy link may have been clicked or a suspicious communication responded to.

What have you done to prevent identity theft?

Employee education is one of the strongest tools in our arsenal to fight cybercrime.  NACHA, the Electronic Payments Association, suggests that one simple question can make the difference between an infected network and a protected one. Teaching our employees to always ask, “Does this email make sense?” before responding to it, opening an attachment, or clicking on a link, can make all the difference.   

Regularly remind your staff that financial institutions, government agencies, and associations will not request personal identification numbers (PINs), user names, passwords, or account verification via an email. Should they receive such a request, it is best to delete the email rather than risk infecting your network. 

Emails from family and friends may include links to sites that also may infiltrate the network. Asking, “Does this email make sense” includes considering whether or not it makes business sense to open an attachment or link to an unknown site. 

When in doubt, NACHA suggests: 

Using a lock up service such as “whois.net” to view domain registration information of an email sender.

Contacting the sender to determine legitimacy, but never use the phone number included in the email.

Deleting the email. 

How have you been educating your staff about the perils of cybercrime?

It’s easy to understand why ministries believe they are less likely to become a victim of a financial crime. This is because of the great trust they have for their staff. And while that trust may have been earned or even warranted because of their common Christian bond, internal controls are still necessary. Proper controls don’t say “We don’t trust you.” Instead, they say, “We want to protect you.” Not only do they remove the opportunity for any misappropriation of funds, they also catch errors and protect staff from innuendo and false accusation if a loss is incurred.

Here are six key elements of internal controls for churches and ministries:

1. Maintain clear organizational structure, including proper channels for reporting suspected improprieties.

2.  Keep policies and procedures that are clearly written, current, and accessible. This leaves no question about authority, and helps part-time and volunteer staff carry out activities and continue them during periods of turnover.  

3.  Implement separation of duties. Some of the most important separation of duties for ministries include handling donations and being responsible for recording the receipts in the accounting records. A key component is the routine review and reconciliation by someone other than the preparer or transactor to determine that transactions have been properly processed.  

4. Practice dual control over all cash donations. Two persons should be assigned counting responsibility for all cash and for deposit preparation. The cash counters should not also prepare the deposits, and all positions should be rotated periodically.

5.  Require dual control of cash until it is delivered to the bank or a courier. A locked safe that requires two distinct individuals to remove the cash keeps it secure.

6.  Implement dual control for online banking systems. Individuals who create files should be different from those who release files for processing. 

What other financial controls has your ministry found helpful?

Most everyone knows that an ounce of prevention is worth a pound of cure. This adage is certainly true when combating banking fraud. Prevention is especially important when dealing with a type of fraud known as “corporate account takeover.” Ignore prevention and your ministry could end up dealing with financial loss, negative publicity, and recovery efforts that divert time from kingdom work.

Corporate account takeover occurs when cyber criminals gain control of an organization’s bank account. This commonly happens when malicious software (malware) infects the organization’s computers. This malware is often delivered through very legitimate looking emails with infected links or attachments. Once embedded in a computer, this malware captures personal information and log-on credentials to online banking applications, allowing fraudsters to electronically pilfer money from the unsuspecting organization. It is because of threats like this that ECCU incorporated state-of-the-art security into its new online banking system.

When the Association for Financial Professionals (AFP) conducted a survey in 2010, 14 percent of the respondents had experienced corporate account takeover fraud. While only 2 percent suffered a financial loss, the time wasted to investigate and restore security diverted those organizations from the work they are called to do.

To prevent this kind of fraud, NACHA – The Electronic Payments Association, recommends the following steps:

1. Require dual control for ACH and wire transfer payments. This means that if one person authorizes creation of a payment file, a second person must authorize release of that file.
2. Ensure that all antivirus and security software and hardware for all computers (including laptops) used for online banking and payments are up-to-date.
3. Require that any computers used for online banking and payments are dedicated solely to those activities. This means they are not used for web browsing or social networking and are not connected to an internal network.
4. Monitor and reconcile accounts daily so you can spot fraudulent activity in time to take action.
5. Utilize routine and “red-flag” reporting (i.e., alerts about unusual activity) for transactions.

If your ministry’s bank account falls victim to corporate account takeover, contact your financial institution immediately so they can:

• Disable online access to accounts
• Change online banking passwords
• Open new account(s) as appropriate

Your financial institution should also review all recent transactions and any authorizations on file. Anything suspicious should be cancelled immediately.

What steps has your ministry taken to prevent fraud like corporate account takeover?

We live in an acronym-loving world. Nobody ever just laughs anymore, we LOL. And if you need something in a hurry, it’s ASAP. We bankers are no exception; we love a good acronym as much as the next person. 

So, what I have to say is important, but it requires a bit of an acronym-tutorial for you to follow. Consider this your official cheat sheet:

ACH: Automated Clearing House

RDC: Remote Deposit Capture

AAP: Accredited ACH Professional (Sure enough, we even have an acronym in an acronym!) 

NACHA: National ACH Association

Ready now? Here we go:

If you are currently an ACH originator or you are thinking of becoming one, finding a financial institution with an AAP on staff should be a priority. The AAP certification establishes professional standards based on best practices in the industry as defined by NACHA. The certification requires intensive study and processing experience, passing a grueling exam, and ongoing education requirements. A banker with an AAP accreditation is highly skilled and can help you understand ACH required rules, risk mitigation, and industry best practices.

ECCU (c’mon, you know this one) is committed to a strong and secure ACH program, and we currently have six AAPs on staff. How does this help our members?  One ministry member was having difficulty importing her ACH file into our online banking module. Her donor file had more than 8,000 entries, and she did not know where the error occurred. She called our support team, and one of our on-staff AAPs securely reviewed her file and found a missing account number. The staff member then walked her through correction, the file was uploaded, and those 8,000 donor transactions were completed!

An AAP can also help when a ministry is looking to start a new type of ACH processing.  For example, we had a ministry request to start TEL transactions. (Oops, another acronym. TEL transactions are made when an oral authorization is received via the telephone.)  One of our AAPs contacted the ministry to discuss the transactions, and through that dialogue realized TEL transactions were not a good fit for the ministry. Our AAP helped them understand how to improve their agreement with their clients to obtain authorization up front, eliminating the need for the phone call and streamlining their payments activity.

Do you have a success story from working with an AAP? Post a comment to share with our readers.