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Internet Crime Complaint Center spots scam trends

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WASHINGTON (7/18/11)--Distributed denial of service attacks (DDoS) are on the rise, according to the Internet Crime Complaint Center's (IC3) Scam Alerts released Thursday. Although credit unions may not be specifically targeted, at least one bank's Internet banking services were hit by this type of attack, said IC3, which tracks information from law enforcement and complaints submitted by victims. One reason for the DDoS increase is the availability of software tools that allow anyone to participate in a DDoS, said the scam alert. Gaming sites have been targeted by multiple hacking groups--some in response to the company itself, others in response to group rivalries. Some DDoS attacks--usually to smaller e-commerce based businesses--distract the organization from other criminal activity. One group disrupts the organization's website traffic while others compromise servers and retrieve data. One company reported that an attack on its organization lasted 10 days, although its Web hosting company tried multiple solutions to stop the attack, said IC3. A financial institution was unable to stop an attack on its Internet banking services segment of its site because of an overwhelming load--more than 8,000 hits per second--on the bank's login screen. Although attackers did not succeed in penetrating the network, the inundation of hits on the communication lines meant customers could not access their accounts. Other trends in cybercrime:
* Extortion e-mails targeting professionals, mainly physicians, with allegations that could harm their reputation and threatened loss of business. The e-mails offer to remove the content from archives for $250. Others hire people to write "complaints" about a company and add them to a website. The going price is $10 per post. * Scams promising large winnings and threatening victims if they don't comply. Spam attachments claiming to be from the Federal Bureau of Investigation (FBI) and the Economic and Financial Crimes Commission initiate a Nigerian scam that threatens to send an agent to the recipient's home for questioning if the recipient doesn't sent $250 for issuing a "clearance document." * E-mails that impersonate the FBI and contain a Trojan virus. The messages say the FBI has noted the recipient has visited 40 illegal websites and instructs the recipient to answer questions in a document, which happens to have malicious software carrying a virus. These are similar to e-mail campaigns that generated in 2005 and 2006. * Threatening calls that impersonate IC3. In two scenarios, which involved threatening victims with court and jail time for using "payday loans,"the cybercriminals had information such as the victims' Social Security numbers and bank account information. * E-commerce fraud. Since mid-March merchants have experienced a "serious increase in fraud attempts," said IC3. Criminals had complete identity information, including name, address, and Internet Provider address of the consumers. IC3 said the information could have been obtained one of four ways: stolen in data breaches; spear phishing that targets consumers with specific e-mails from organizations they do business with; installation of malware; and fake e-commerce donation sites that take advantage of people's willingness to help others during disasters and catastrophes.
Meanwhile, the old tried and true scams are still operating, many of them reeling in credit union members among the victims. In Vineland, N.J., for example, several members of Members First of NJ FCU, reported they had received text messages saying their cards had been deactivated and to call a number. They called the number and were instructed to change the personal identification number (PIN) code for "security reasons." They did, and later found that debits had been made from their accounts. One member reported $591 missing, another lost $286, and a third lost $120. The credit union reimbursed their accounts (The News of Cumberland County July 15).

CU System briefs (07/15/2011)

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* WEST LAFAYETTE, Ind. (7/18/11)--A tip to would-be credit union robbers: Don't take a cell phone photo of yourself brandishing the weapon and leave it behind when abandoning the getaway car. That's what happened when two men entered West Lafayette, Ind.-based Purdue FCU on May 24 and displayed weapons. One robber jumped on the counter, demanding cash. One suspect placed a handgun against an employee's chest. The robbers fled with the money in a dark sport utility vehicle (SUV), which police later found abandoned. Both men also left their cell phones in the vehicle. One phone had several photos of a handgun and a man pointing the weapon at the camera. Christopher A. Whirl, 24, Chicago, a co-owner of the abandoned SUV, was arrested and charged with one count of armed robbery and one count of theft. Xxavier Jones, 25, also of Chicago, is still at large. Police said they think the photo is of Jones (Journal & Courier July 15) … * DETROIT (7/18/11)--Dante DeMiro, 44, who pleaded guilty to operating a Ponzi scheme that defrauded an Iowa credit union, a bank , municipalities, school districts and trade unions, was sentenced Tuesday to 10 years in federal prison for bank and wire fraud. The Milford, Mich., man also was ordered to pay restitution of nearly $13 million he received by "investing" funds in "low-risk certificates of deposit" through MuniVest Financial Group and MuniVest Services LLC. Instead, he used the money to buy real estate and luxury items, pay other investors, make loans and gamble. He regularly sent victims fake investment summary reports. The frauds occurred from 2007 to 2010 (Detroit Free Press July 13 and Chicago Tribune July 12) … * POTTSVILLE, Pa. (7/18/11)--A former employee of Hidden River CU, Pottsville, Pa., was sentenced Wednesday to six to 23 months in prison for embezzling more than $58,000. Jennifer L. Doyle, 31, pleaded guilty June 2 to theft by deception, tampering with records and misapplying entrusted, government or financial institution property. She also was ordered to pay more than $58,295 in restitution as well as costs and $50 to the Criminal Justice Enhancement Account. Court records indicated she took investment checks and instead of allocating them to the correct account, deposited them in her personal accounts and used several methods to hide the deposits ( July 14) … * HAGERSTOWN, Md. (7/18/11)--Ongoing Operations, a credit union service organization (CUSO) and CUNA Strategic Services provider, has announced the election of its new board of manager officers. Jeff Goff, vice president of administration for HEW FCU, Alexandria, Va., was elected chairman; Bruno Sementilli, CEO of Quorum FCU, Purchase, N.Y., was elected vice chair; Jeff Arvai, CEO of Transportation FCU, Washington, D.C., was re-elected secretary; and Sean Zimmermann, vice president operations & technology of Tower FCU, Laurel, Md., was re-elected treasurer. The CUSO, originally founded by several credit unions in the Washington, D.C., metropolitan area, is celebrating its fifth anniversary this summer. It offers a full range of business continuity solutions for credit unions nationwide … * FORT WORTH, Texas (7/18/11)--American Airlines FCU (AA CU), based in Fort Worth, Texas, will implement Bounce ProtectionPlus, an overdraft program that allows members to reduce their overdraft fee to a penny in many situations, the $5.2 billion asset credit union announced (PR Newswire July 13). Instead of charging the standard $25 fee each time a member has an overdraft, AA CU it will charge one cent if the member either corrects the overdraft before 10 p.m. CT the same day or has a small overdraft that did not take the end-of-day account balance into the negative by more than $10. "We know that our members occasionally have an emergency or make a small error when balancing their checking account," said Nancy Crouch, AA CU's director of card services. "And we believe that a small mistake shouldn't result in a big penalty," she added. The changes apply to all debit card and ATM transactions on checking accounts that have opted-in to the service …

Ratings agency affirms Southeast Corporate rating

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CHICAGO (7/18/11)--A ratings agency has affirmed the "A+" long-term Issuer Default Rating (IDR) and "F1+" short-term IDR of Tallahassee, Fla.-based Southeast Corporate FCU, with a "stable" rating outlook. The rating reflects Southeast's IDR is current at its Support rating Floor and reflects that the corporate credit union's standalone financial position--absent external support--remains an "E" (requiring external support), said Fitch Ratings, a Chicago-based firm (BusinessWire July 1). Southeast "continues to benefit from the various support mechanisms put in place to maintain liquidity in the corporate credit union system and that it is still operating with regulatory forbearance " from the National Credit Union Administration (NCUA), Fitch said in a press release. Southeast is in the middle of raising $80 million in perpetual contributed capital from its member credit unions by October as a part of its 10-year strategy and recapitalization plan (News Now May 24). The company began its 90-day capital subscription process and expects commitments by October. It also plans to reduce its balance sheet to $2 billion and its operating expenses to $10.6 million, and manage its legacy assets. Fitch said the corporate continues to face capital challenges and additional "other than temporary impairment" (OTTI) charges on its legacy assets. To date, Southeast has recorded $43.5 million of OTTI on 25 mortgage-related securities, said the ratings agency. "The company's Individual Rating could move positively if it makes notable progress towards achieving the objectives of its business and capital plan," Fitch concluded.

Maine CUs 1Q growth outpaces national trends

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PORTLAND, Maine (7/18/11)--Maine credit unions met or, in many instances, exceeded national trends in key growth areas, according to a First Quarter Performance Report. The report--recently released by the Maine Credit Union League to member credit unions--indicated growth in assets, shares and loans and reinforced the strength of Maine’s credit unions (Weekly Update July 15). Some of the highlights for first quarter 2011 include: a 9.3% increase in the amount of first mortgages outstanding, 4.96% share growth, and total capital levels at 10.6% of assets--well above Maine thrifts and U.S. banks--and 12.1% growth in member business loan balances, nearly double the national average when compared with first quarter 2010. Other positive signs the report found include an 11 basis-point decrease in the delinquency rate over the same period a year ago, and an increase in the average member relationship--the outstanding combined loan and share balances per member--to $13,504. “As indicated in this quarterly report, Maine’s credit unions remain vibrant and healthy, and reflect the fact that an ever-growing number of Maine consumers continue to turn to Maine’s credit unions,” said league President John Murphy. Callahan & Associates compiled the report for the league.

With end of Minn. shutdown CUs aid still stands

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ST. PAUL, Minn. (7/18/11)--With the Minnesota government ending its statewide shutdown, at least one credit union says that those who suffered from the two-week-long shutdown still can find extra assistance. Affinity Plus FCU, a $1.3 billion asset credit union in St. Paul, announced Thursday it will set aside $25 million for a loan program to help state employees to help cover skipped loan payments. It also will provide refinancing or low-interest loans, said its website. The credit union's offer was featured in the Winona Daily News (July 15). The credit union's St. Paul-Lafayette branch in the metro area and local branches Friday held a "State Shutdown Aid Fair" Friday during business hours. The credit union offered refreshments and discussed options with members for a personalized approach to ease any financial hardship. Among the personalized solutions offered: a financial assessment, budget planning individual product and services solutions, skipping payments, mortgage modifications, including refinancing mortgages and more. Just after the credit union's announcement the state revealed the governor and lawmakers were working on a deal to stop the shutdown. Late Thursday night they announced they had reached a deal and that the state government would re-open soon. Friday was to be the last paycheck for workers affected by the shutdown.

CUs helping storm victims in several states

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MADISON, Wis. (7/18/11)--Several credit unions nationwide are helping victims of devastating storms recover by providing loans, supplies and donation checks.
Click to view larger image Presenting a $5,000 donation check for tornado debris removal to Steve Kirkpatrick (second from left), president of the United Way of Madison County, Ala., were, from left, Greg Olmsted, Marquetta Cantrell, June Landrum, and Selina Billions, all officers of the Northeast Alabama Chapter of Credit Unions. A $2,500 donation from the credit union chapter had been matched by the Southeastern Credit Union Foundation for the debris removal. The foundation is associated with the League of Southeastern Credit Unions, which serves credit unions throughout Alabama and Florida. (Photo provided by the League of Southeastern Credit Unions)
The Northeast Alabama Chapter of Credit Unions and the Southeastern Credit Union Foundation presented a $5,000 check Thursday to Steve Kirkpatrick, president of the United Way of Madison County, Ala., for debris removal needed in the aftermath of April tornados. Members of the chapter include Alabama CU, Tuscaloosa; Alabama Telco CU, Birmingham; Councill FCU, Normal; Family Savings CU, Gadsden; Family Security CU, Decatur; North Alabama Educators CU, Huntsville; Redstone FCU, Huntsville; Rocket City FCU, Huntsville; Stevenson (Ala.) CU; and Wolverine Employees CU, Decatur. Individual credit unions also have assisted disaster victims in many ways since April. A $2,500 donation from the credit union chapter had been matched by the Southeastern Credit Union Foundation for the debris removal. The foundation is associated with the League of Southeastern Credit Unions, which serves credit unions throughout Alabama and Florida. Other examples are:
* Great Lakes CU (GLCU), North Chicago, Ill., is helping storm victims with a discounted Signature Loan program available to members in three counties of Illinois and Wisconsin. The limited-time loan program is--a 12.99% annual percentage rate with a 48-month maximum term and borrowing limits to a maximum of $5,000. “Some area residents are struggling in the aftermath of the recent violent storm and are encouraged to apply at any of GLCU’s seven Lake County branch locations or online,” said Vikki Kaiser, president/CEO. “We would like to assist people with any unexpected expenses they may have incurred since the storm [July 11] wherever possible, whether it is to help pay for downed-tree removal or to help pay for any repairs they may need to their home or vehicles.” * Pioneer West FCU, Charleston, W.Va., collected relief supply items--blankets, baby items, nonperishable food, health and beauty items, toiletries, disposable plates and utensils, and monetary donations--in a community-minded effort to help victims of severe tornados in Joplin, Mo., in May (Charleston Gazette July 13). More than 150 people were killed when tornados struck Joplin and surrounding areas. All four branches of the credit union participated--including employees and members--with a pickup truck full of the donations slated to head to Missouri last week.

SECU investment CUSO exceeds 100M

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RALEIGH, N.C. (7/18/11)--Credit Union Investment Services (CUIS), an investment service organization of State Employees’ CU (SECU), Raleigh, N.C., has exceeded $100 million in assets. With 230 non-commissioned, multi-licensed representatives statewide, CUIS focuses on the average credit union member. Most members made initial investments of $1,000, the previous minimum required to open an account with CUIS, according to $22 billion asset SECU. CUIS recently made a move to accommodate more investors by lowering the initial investment amount to $250. All CUIS representatives are salaried and receive no commission. Representatives advise investors based on the member’s objective, time horizon, risk tolerance and overall financial condition.

Father Kramer CU Lake Trust CU intend to merge

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CENTER LINE, Mich. and LANSING, Mich. (7/18/11)--Father Kramer CU, with $7 million assets, Center Line, Mich., and $1.6 billion asset Lake Trust CU, Lansing, Mich., have announced their intention to merge. State and federal regulators--the Office of Finance and Insurance Regulation, the National Credit Union Administration--and Father Kramer CU members still must approve the merger. “We’re able to offer additional value for Father Kramer members and they help to strengthen the cooperative through their participation, which is great for the current Lake Trust membership,” said Lake Trust CEO Stephan L. Winninger. “Over the years it’s become increasingly difficult to manage our credit union in the face of a challenging economy,” said Arnie Lesner, Father Kramer board chairman. “The challenging economy has depressed our earnings, and we’ve continued to see our assets decline, both of which have limited our offerings to our members.” The boards of both credit unions support the merger.

Share It Members on how shared branches help them

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HARRISBURG, Pa. (7/18/11)--Pennsylvania Credit Union Service Centers Inc. (PaCUSC) announced the first week’s winner from its “Share It and Win” campaign to promote shared branching to members of participating credit unions. Credit union members were asked to submit an entry answering the question, “How has shared branching helped you?” Members were directed to the campaign enter the contest and learn more about shared branching as a benefit of being a member of a credit union (Life is a Highway July 15). PaCUSC reported more than 3,000 members visited during the first week of the contest, and PaCUSC received 328 entries. A team of communications professionals affiliated with the Pennsylvania Credit Union Association reviewed the entries based on personal emotion, validity and overall effectiveness of communicating shared branching as a benefit. Denise from American Heritage FCU, Philadelphia, submitted the winning entry. She typically vacations at a new location each year, and during one trip, found shared branching to be almost too good to be true. Her entry said: “Each year I go on vacation and choose a different location each time. Last year I went to Las Vegas and needed to withdraw money from my account because of an emergency. Although I received information about shared branches, I did not believe it. I was directed by a member of my branch to a shared branch. When I arrived, I expected to have to go the ‘customer service’ route and wait to have information verified, etc. Well, I had to do none of those things! Instead I was able to conduct my business within five minutes through teller services. This experience was pleasant and as efficient as using my own branch and the tellers were equally as polite.” PaCUSC provided American Heritage FCU with a $100 Visa gift card, which the credit union will present to Denise for her winning entry.

CUNA Councils celebrate 5000 members

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MADISON, Wis. (7/18/11)--The six CUNA Councils have reached the 5,000-member milestone, a result of several years of consistent growth. “What’s really significant about the 5,000-member milestone is the fact that we’re helping more and more credit union executives handle immediate problems and plan for future successes,” said Erin Mendez, Council Forum chair and executive vice president/chief operating officer of SchoolsFirst FCU, Santa Ana, Calif. "The CUNA Councils allow credit union professionals the ability to reach out to one another, explore best practices, solve problems, obtain feedback and tap into resources that are specific to their role at the credit union," she said. To celebrate the event, Councils Vice President David Rohn announced the “More Than Ever” campaign that gives current members and new members the opportunity to win one of five prizes. Until Aug. 31, credit union executives can join the Councils at a special rate. Current members can help Councils celebrate by submitting their story about what membership means to them now more than ever! Anyone joining or submitting a story is entered in a drawing to win: a grand prize of a $5,000 CUNA education/training scholarship; a complimentary registration to a Council conference; a 2012 Council membership; an Apple iPad; or a $100 Visa gift card. Founded in 1994, the CUNA Councils originally included the Marketing (now Marketing & Business Development), HR (now HR, Training & Development), and CFO Councils. In the years that followed, three additional Councils were added: Lending, Technology, and Operations (now Operations, Sales & Service). Membership has doubled since 2003, and prior membership milestones include reaching 3,000 members in 2005 and 4,000 in 2007. For more information, use the resource link or call 800-356-9655, ext. 4368.

Breakouts set for CUNA Community CU and Growth Conference

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MADISON, Wis. (7/18/11)--The Credit Union National Association’s (CUNA) Community Credit Union & Growth Conference, to be held Oct. 24-27 in San Francisco, will include breakout sessions covering topics such as best practices, the state of the credit union movement, growth strategies, innovation and membership growth. Among the sessions and speakers:
* “Best Practices from Successful Community Credit Unions,” Jim Blake, president/CEO, HarborOne CU, Brockton, Mass., and Erika Bell, vice president of strategy and services, Latino Community CU, Durham, N.C.; * “Return on Innovation,” Matt Davis, director of innovation, and Denise Gabel, chief innovation officer, Filene Research Institute, Madison, Wis.; * “Creating Sustainable Growth Strategies,” Josh Allison, relationship development manager, Horizon CU, Spokane Valley, Wash.; * “C3: Aligning Credit Unions, Communities & Consumers Through Microenterprise,” Scott Butterfield, principal, Your Credit Union Partner, Seattle.; * “Executing Innovation: A Panel Discussion,” Julie Ferguson, owner, JRF Consulting Services LLC, Philadelphia; Amy McGraw, manager, growth, business development and marketing, Public Service CU, Romulus, Mich.; and Brett Wooden, business development manager, Unitus Community CU, Portland, Ore.; * “Product Strategies to Attract and Create the Loyalty of the Hispanic Community,” Miriam DeDios, vice president, and Warren Morrow, CEO and founder, Coopera Consulting, Des Moines, Iowa.; * “Leadership Skills That Lead to Growth,” Julie Ferguson, owner, JRF Consulting Services LLC.; * “New Vision for Lending: An Interactive Discussion,” David Polet, program manager/voice of customer, CUNA Mutual Group, Madison, Wis.; * “How to Avoid the Five Biggest Post-merger Heartaches,” Frank Drake, partner, Smith Debnam Narron Drake Saintsing & Myers, Raleigh, N.C.; * “Credit Union Mission, Meaning & Staff Motivation,” Matt Purvis, vice president, Northwest Community CU, Springfield, Ore.; * “Strategic Recruitment for the Ideal Board,” Jeff Rendel, president, Rising Above Enterprises, Corona, Calif.; and * “The Benefits of Serving Members of Modest Means,” Mark Lynch, REAL Solutions field coach, National Credit Union Foundation, Madison, Wis.
For more information, see Thursday’s News Now or use the link.