Industry Reports: For Senior Fraud, Credit Unions’ Best Defense May Be Knowing Their Members

​Scams targeting older Americans are becoming more sophisticated, but credit unions have tools that technology alone can’t provide.

By Marc Rapport
Contributing Editor

Key Points

• Senior fraud increasingly combines impersonation, urgency and new technology.
• Frontline employees and trusted relationships can stop losses before they happen.
• Credit unions want more tools to delay suspicious transactions and protect vulnerable members.

June may have put a spotlight on senior fraud, but for credit unions and their older members, the problem doesn’t follow the calendar.

Fraudsters are using government and business impersonation, romance schemes, cryptocurrency pitches, tech support scams and increasingly convincing artificial intelligence to pressure people to send money their way, often leaving financial institutions with only a narrow window in which to recognize what is happening and persuade a member to stop.

Brad Thaler

Brad Thaler, head of legislative advocacy for America’s Credit Unions, said, for example, that consumers 60 and older were five times more likely than younger people to report losing money to a tech support scam in 2024, citing Federal Trade Commission data showing $159 million in reported losses among older consumers.

“This is a serious problem that we regularly hear from credit unions about,” the veteran trade group executive said, adding that fraudsters often impersonate a government agency or business and use spoofed calls or text messages to convince a senior to release funds.

The Scams They Are A’Changing
The scamming techniques are becoming harder to recognize as technology improves fraudsters’ ability to sound, look and communicate like someone a member trusts.

Raven Garner, assistant vice president for fraud and security at $4.8 billion Ascend FCU in Tullahoma, TN, said impersonation scams can involve financial institutions, government agencies, utilities or family members, while AI now helps criminals create convincing emails, texts and voice recordings, making prevention dependent on suspicious-activity monitoring, fraud-detection technology, employee training and member education working together.

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David Techau

Out west, Golden 1 Credit Union is seeing a similarly broad mix that includes romance and companionship scams, grandparent and family-emergency schemes, investments, cryptocurrency and tech support fraud, said David Techau, director of enterprise fraud at the $22.1 billion cooperative in Sacramento, CA.

“We’re seeing scammers leverage social media, artificial intelligence, impersonation techniques, and emotional manipulation at a scale we haven’t experienced before,” Techau said. He said voice cloning and AI-generated content is adding credibility to schemes designed to create urgency, fear or trust before a victim has time to seek advice.

And in Austin, Greater Texas Credit Union fraud manager Monica Caudle and fraud analyst Maricruz Gomez said romance scams remain among the biggest problems they see at their $995.4 million shop, while fraudsters’ online access to older members through social media and email has increased.

They also cited bitcoin investment pitches, loan scams, an unusual scheme involving purported publishers offering to turn seniors’ lives into books or movies, and AI voice and image cloning used to convince victims that relatives are injured or in legal trouble and they must “act now.”

The Credit Union Relationship: A Human Advantage
Technology can identify patterns, but the credit union relationship can provide something a fraud model cannot: context about the person making the transaction.

“We see financial activity in real time, but we also see people,” said Techau at Golden 1. “Our employees often know members personally and can recognize when something doesn't look right.”

He said an employee who knows a member may recognize that an unusual withdrawal, branch conversation or contact-center call doesn’t fit the person’s normal behavior and can use that moment to ask another question before money leaves the account.

That advantage becomes especially important because members caught in a scam may believe the fraudster rather than the employee trying to protect them.

Thaler at ACU said he has heard from credit unions about members more inclined to trust an unknown voice giving instructions over the phone than the credit union employee standing in front of them. That illustrates why relationships, patience and the ability to slow a suspicious transaction can matter as much as the technology used to detect it.

“That’s why legislation to allow financial institutions to delay suspicious transactions is so important,” Thaler added.

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Ascend has added another tool with its voluntary Advance Consent Agreement for members 65 and older, which lets participating members designate someone the middle Tennessee credit union can contact if it suspects fraud or financial abuse.

“That person is not given access to the member’s accounts or authority to make financial decisions,” Garner noted, describing the trusted contact instead as another layer of protection that preserves the member’s independence while giving Ascend another potential avenue for intervention when something appears wrong.

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Asking the $30,000 Question
Greater Texas saw the value of that human intervention when a member arrived at a branch seeking to withdraw $30,000 in cash and completed a questionnaire used for large withdrawals.

The member denied plans to put the money into a bitcoin machine but said it was going into a kiosk, prompting a recently trained employee to recognize the warning sign, move the conversation away from the teller line and give the member time and privacy to reconsider what was happening.

The member left without the cash and later returned to explain that someone claiming to be from the FBI had said the account was under investigation and instructed the member to withdraw the money and put it into a machine for safekeeping, Caudle and Gomez said.

The $30,000 never left the account, an outcome that underscores their view that fraud prevention has to extend beyond a specialized department: “It’s a credit union-wide effort. It doesn’t just rely on the fraud team to prevent it,” the Greater Texas fraud fighters said in a joint email interview.

Ascend, meanwhile, trains frontline employees to watch for sudden changes in transaction patterns, large or unusual withdrawals, unexplained wires, unusual payments to caregivers or third parties, changes in account ownership and members who appear confused or pressured by someone accompanying them.

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Raven Garner

When red flags appear, employees can ask questions, verify a transaction, escalate concerns internally and use available protective measures, an approach Garner summarized this way: “Ultimately, the most effective fraud prevention strategies combine technology with a personal, member-first approach.”

Creating More Time to Intervene
The challenge is that protecting a member can collide with that member’s right to control and access his or her own money, particularly when the member has authorized the transaction and remains convinced it is legitimate.

The Greater Texas fraud analysts said their cooperative must respect members’ ownership and privacy even after employees have warned them, while at Golden 1, Techau’s advice to consumers is deliberately simple: “The best defense is to slow down, verify requests independently, and never feel pressured to act immediately.”

Thaler said that tension is one reason America’s Credit Unions supports recently introduced measures such as the STOP Senior Fraud Act, which he said would give financial institutions additional ability to delay suspicious transactions, along with the STOP Payments Fraud Act targeting check fraud.

“Ensuring that credit unions have the tools to combat fraud is a top priority of America’s Credit Unions,” he said, while also calling for a broader federal consumer-education effort across multiple media channels, comparable in reach and persistence to the long-running Smokey Bear wildfire-prevention campaign.

For credit unions, then, senior fraud prevention increasingly means combining technology that spots unusual behavior with employees who understand what to do when the alert involves a real person standing across the counter or speaking on the phone.

Fraudsters may keep changing their methods, but the responses from these credit unions point toward a consistent defense: educate members before the scam arrives, train employees to recognize when something doesn’t add up and create enough trust, and enough time, for someone to ask one more question before the money is gone.

“We have both an opportunity and a responsibility to help,” said Techau at Golden 1. “Protecting members' financial well-being is central to our mission, and that includes helping them navigate increasingly complex fraud threats.”

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