How familiar are you with U.S. passport cards?
This isn’t the booklet with the exciting stamps from exotic locales, but rather a form of ID that resembles a driver’s license. Not only is this ID not widely recognized, but it’s also easy and inexpensive for fraudsters to create convincing fakes.
Scammers have certainly taken note. Since 2018, more than $10 million has been lost to passport card fraud in the United States, with an additional $8 million in attempted fraud prevented.
Fortunately, there are simple ways to protect your credit union from this growing threat.
First, Understand How The Scheme Works
Criminals initially gather personal information about their targets through the dark web or physical documents, like discarded mail.
Using this information, they create a counterfeit passport card featuring their own photo. Once they have this plausible form of ID, they visit a credit union branch and attempt to validate their identity.
Once validated, fraudsters can:
- Withdraw funds.
- Cash forged checks.
- Initiate wire transfers.
- Set up joint accounts using the victim’s information.
If questioned about their identity, the scammer might produce additional counterfeit documents, such as a credit card in the victim’s name.
After they have exhausted every avenue using those credentials, they start the process over with a new victim and a new card.
4 Ways To Spot Red Flags
Knowledge is crucial. Simply educating your frontline staff to identify potential deceptive tactics goes a long way. Here are some suggestions you can implement immediately.
Ask Specific Questions. Instead of general account questions, like balance inquiries, ask for specifics such as the account holder’s phone number, date of birth, or Social Security number. If their answers appear vague, or they take a long time to answer, take a closer look. And, always compare their photo or signature to what you have on file.
Question Large Transactions. Be wary when a passport card holder requests:
- Withdrawals just below the Currency Transaction Report (CTR) threshold.
- To cash a large check or to purchase multiple cashier’s checks.
- Large wire transfers.
- To set up a joint account with someone they have no prior relationship with.
Be Aware Of Location. Con artists often choose branches where the victim is less likely to appear. If you have branches spread across multiple towns, raise the red flag when a passport card holder from a different town comes to your local branch. Have all their other transactions taken place at a different branch? Taking a closer look could save your credit union thousands.
Recognize Genuine Passport Cards. Familiarize yourself with the features of legitimate passport cards. These government-issued IDs have several security features designed to thwart deception, including:
- Color-shifting ink.
- Textured surfaces and raised print.
- Holograms.
- UV art.
- Microtext.
Education Is Key
The best way to stop fraud is by keeping your credit union staff alert and up to date on the latest schemes.
CUES First Line of Defense, an online simulation-based training program, offers timely, effective, and low-cost fraud prevention training, using real-life cons reported by the FBI and Office of the Comptroller. Interested in learning more? Book a demo today!
