New members opening new checking accounts. Long-established members who have had accounts for many years. Members who asked for the service. Members who never thought about it before.
Different credit unions are finding different types of members are signing up for a common kind of product—one that helps protect them from identity theft, and mitigate what happens should they be targeted by fraudsters. The CUs are offering a variety of products based on their desires to minimize cost, maximize coverage or making it easy to sign up.
Members Asked for It
Members of Partners 1st Federal Credit Union, Fort Wayne, Ind., were asking for the service, says VP/Marketing Cindy Emmerich, CME.
“We surveyed our staff to determine if identity theft protection coverage should complement an existing product, be offered as a stand-alone product for purchase, or be offered as a blanket coverage to everyone,” says Emmerich. The 28,888-member, $248 million CU’s staff believed that the first two options would better meet members’ needs.
“We were in the midst of revamping our checking account options, so it was a natural to offer it as an add-on,” Emmerich says. In less than a year, 1,200 members signed up.
“Since it was our current members who requested the service, they were the first to sign up,” she says, estimating that about 95 percent were cross-sold the product by the CU’s staff.
Some members turned to the CU’s offering after comparing what they were paying other identity-theft prevention vendors. The “members only” cost savings added to members’ appreciation of the CU, Emmerich adds. The CU charges $1.99 per month. By comparison, popular as-seen-on-TV vendor LifeLock charges $9 and $13.50 monthly for its two plans. American Express asks a bit more for its ID Protect and ID Protect Premium—$9.99 and $15.99, respectively. Credit score giant Equifax hits those who sign up for the most detailed of its four plans for $19.95 a month.
Indeed, it was a combination of product offerings and price that made Partners 1st FCU choose ID Reclaim from Harland Clarke, Decatur, Ga. “It provided the coverage that we were looking for at an affordable cost,” Emmerich says. “They also provided options for the member depending upon their circumstances.”
Nearly 60 percent of the members who have signed up for one of the products have chosen ID Reclaim Family, which offers fully managed recovery, covers the account holder, children under 25, and parents of the account holder at the same permanent address, in elder care, or deceased less than 12 months.
ID Reclaim Family Plus adds credit monitoring for the primary account holder, including an annual report and credit score, for a dollar more. Almost another 30 percent chose that option. Credit monitoring is available for an additional adult under the ID Reclaim Family Plus plan for $2 more per month.
|Protecting Your CU, Too
While members think in terms of financial institutions protecting them against identity fraud, credit unions also must protect themselves against fraud by would-be members, borrowers and employees.
Credit thieves may attempt to open accounts using a credit profile number, a pseudo-Social Security number. Other fraudsters favor synthetic name fraud, which blends a stolen or fabricated SSN blended with the real name and date of birth.
Computer Information Development, Arcadia, Calif., offers a service that allows access to the Social Security Administration’s Consent-Based Social Security Number Verification.
CID’s CEO, Paul Campione, says, “CBSV is a highly recommended service for credit unions because it is used in four operational areas: new member applications, loan originations, pre-employment of new hires, and fraud investigations. CBSV is the premier method of identifier verification, direct to the official record resources of the Social Security Administration Master File.”
Better Than Basic
$1.3 billion, 114,000-member Apple Federal Credit Union, based in Fairfax, Va., partnered with Identity Experts in 2006. Its program, available to individuals for $9.95 a month and families for $12.95, includes a personalized risk assessment and protection test, monthly e-newsletter and fraud alerts. It provides weekly notification of changes in credit and a copy of the member’s current credit report.
But perhaps most important, says John Harwell, AVP/risk management, is the plan’s recovery aspect. A personal advocate manages each case of ID theft from beginning to end, a recovery plan is put together, and legal assistance is available for complex cases. Financial reimbursements are also covered. “This whole process helps people,” Harwell says.
That’s because besides being time-consuming, dealing with a credit attack can be difficult and perplexing, he says. For example, many victims don’t realize that a complaint must be filed where the theft originated, not in the local jurisdiction.
At Poughkeepsie, N.Y.-based Hudson Valley Federal Credit Union, member requests led to an upgrade of offerings. The CU had offered a basic program since 1990, but no real plan, says Bob Doran, director of property and casualty at the $3.1 billion, 240,000-member credit union.
Hudson Valley FCU in 2008 chose to work with Affinion Group, a CUES Supplier member based in Norwalk, Conn. The CU calls the program Identity Fraud Protection Plus.
Todd Werner, Affinion Group’s VP/marketing, says the company monitors the credit card numbers and credit reports of subscribers so they can be aware of any odd usage. Without monitoring, it takes an average of 14 months for crimes to be detected, Werner says. That makes the product especially valuable to younger members, whose identities could have been violated for years by the time they need a credit check to get a job or a loan. Finally, the program works to restore credit quickly when fraudsters strike.
“Our members like it,” says Doran. “It’s been very well accepted,” with a few thousand members signing up.
The product is promoted with two mailings a year, and is mentioned on in-branch advertising boards and the CU’s website. But perhaps the best tie-in takes place when the CU has shredding trucks at its branches.
“We pay for the trucks, and they spend three hours at the branch,” says Doran. Members bring their old financial records and credit cards to be destroyed.
Hudson Valley FCU sets up a table near the truck with its literature, including promotions for Identity Fraud Protection Plus. While members are waiting their turn, staffers can talk to them about the product.
Fee income was one of the things executives at Fort Knox Federal Credit Union were thinking about when they considered different identity theft mitigation providers.
The 70,000-member, $970 million CU conducts quarterly surveys, asking just a couple of questions. A recent survey showed that 15 percent of respondents used some form of ID protection at an average cost of $12 a month. “It’s certainly on people’s minds,” says Ray Springsteen, senior vice president.
CU executives believed they could offer a product at a fraction of the price members were paying elsewhere.
“There are a lot of different products out there,” Springsteen says. The CU looked into three in depth, ultimately choosing a July 1 launch of IdentitySecure from Affinion Security Center, a division of Affinion Group. “Its approach was more robust than others,” he adds.
Executives were especially pleased that they are able to build forms and information into the CU’s processor, USERS, from CUES Supplier member Fiserv, Brookfield, Wis. The ID protection product will be part of a new account package that incorporates services for member security and account access. The credit union anticipates selling the set of services—including public records monitoring reports—to about 40 percent of account openers.
Charlene Komar Storey is a veteran credit union writer based in New Jersey.