New Fraud Alert Network Aims to Deliver Scam Warnings to Credit Unions and Banks

By Roy Urrico

The ProSight Financial Association recently launched, the ProSight Fraud Alert Network, a digital community and knowledge group designed to help credit unions, banks, and direct-to-consumer fintechs combat fraud more effectively, efficiently, and collaboratively.

Intended for frontline and strategic fraud professionals in the banking industry, the network empowers its members with tools and knowledge to more efficiently resolve fraud cases and help reduce financial losses within their organizations and, ultimately, the industry. The ProSight Fraud Alert Network will be offered to ProSight institutional members complimentary for the first year.

Jason Bartolacci, director, ProSight Fraud Alert Network.

“For the first time, fraud professionals across institutions can digitally connect, share timely insights, and take coordinated action against threats that impact the entire industry,” said Jason Bartolacci, director, ProSight Fraud Alert Network. “We all know that fraud schemes are only becoming more sophisticated, and these threats can’t be fought effectively in isolation. This network creates a trusted environment where fraud professionals know they are acting on timely and reliable intelligence.”

The Chicago-based ProSight Financial Association was formed in 2024 through the merger of the Bank Administration Institute (BAI) and the Risk Management Association (RMA). This merger combined BAI's expertise in retail banking and compliance with RMA's knowledge in commercial banking and risk management to support financial services leaders with insights, tools, and resources, Bartolacci explained.

Defining the Network

The ProSight Fraud Alert Network, he added, provides fraud intelligence, curated research, timely alerts, peer-to-peer collaboration, and a trusted space to share critical intelligence.

Key features of the ProSight Fraud Alert Network include:

• Authenticated directory: The network only admits authenticated fraud professionals from financial institutions and direct-to-consumer fintechs.

• Timely alerts: Members gain access to the latest fraud intelligence to respond quickly to emerging schemes.

• Industry peer collaboration: A dynamic community of fraud professionals across all financial institution types and sizes foster direct communication and coordinated responses.

• Robust knowledge library: ProSight and the network members curate research, case updates, articles, webinars, educational resources, and best practices.

Bartolacci sat down with Finopotamus to discuss the fraud threats to credit unions and other financial institutions and the benefits of joining the ProSight Fraud Alert Network.

Specific Frauds That Need Attention

“It is pretty tough hack into a (financial institution). But it's pretty easy to hack people or exploit operational processes,” said Bartolacci. He spotlighted call centers as an area susceptible to fraudulent activity. “We're seeing an uptick in the attacks targeting soft targets like call center agents and even people within the branches.

“Call center fraud using social engineering has been on the rise for the past couple years. That is threat actors who have either compromised account credentials or they have PII (personal Identifiable Information) or they already know their knowledge-based authentication (KBA) questions of an intended victim. They use the call center to take over that account to either update contact information (a phone number, email). Once they have that updated piece of information, then all subsequent authentication is going to come to an email or a phone number controlled by the threat actor,” explained Bartolacci.

Bartolacci also pointed out that threat actors using call spoofing technology specifically target credit union members by posing as employees to obtain answers to KBA questions. “Then the threat actor records the answer. They will ask things like, ‘What was your last deposit?’ Basically, anything that a bank or credit union would use to authenticate a caller. The threat actors get that information, and then they will turn around and call the financial institution. Then (because) they have the answers to all the knowledge-based authentication questions, they are able to take over that account because they can ‘prove’ they are the actual legit member (or customer).”

And of course, there is the role of artificial intelligence (AI), which Bartolacci admitted has made it more difficult for the financial institutions because “it has made it easier for the threat actors. You used to have to maybe white out or create fictitious documents to create IDs. (Now) you can do all this in a few seconds. You can create W-2s, driver's licenses. (AI) makes it super easy for the fraud threat actors to perpetrate their fraud. And it makes it so much harder for the banks to detect because these look like legit documents or items.”

Holiday Scams

Fraud goes up around the holidays, acknowledged Bartolacci. “There are a couple reasons: People are more distracted (and) they are buying more things online. Anytime that you are increasing, purchasing or logging into things or creating an account, that increases that attack surface.”

Bartolacci mentioned ploys used by threat actors during the holiday season also involve emails, texts messages, bogus sales and coupons and spoofed websites. “Fraud seems to ramp up around the holidays. The threat actors or the scammers know you might not fall for it, but if they blast out 10,000 emails or 10,000 text messages there is a pretty good chance a couple people are going to fall victim to that.”

How can credit unions warn their members not to engage? Bartolacci suggested several courses of actions, such as ramping up member outreach by talking to community groups, colleges, retirement communities, local businesses, chambers of commerce to spread the word; and in-app training and awareness.

How Smaller FIs Benefit from ProSight Fraud Alert Network

The network director recommended credit unions or banks make sure call center agents and other frontline staff internally understand the fraud risks. “Make sure they are trained up, they understand the processes and the controls in place, and they follow those,” he said. “That is the biggest opportunity right now to strengthen these controls.

However, “credit unions, community banks, sometimes might not have a big staff for combating fraud. They cannot do it alone. One of the biggest takeaways, at least on the credit union side is to work together, collect good data, share information, grow your network of trusted partners,” said Bartolacci.

That is where the ProSight Fraud Alert Network can help, noted Bartolacci. “That is what we are trying to do is connect our (network) members. It is an authenticated vetted spot so people can share information like these scams. It is a great place to share insights and best practices. whether or not they join our fraud alert network or not, they should be talking to other credit unions, educating themselves and really staying on top of the current scams and schemes that are occurring right now.”

Bartolacci continued, “We have got a network now of over 900 financial institutions, about 80,000 associate members. They can reach out to ProSight, if they are a member, they have a free complimentary one year for our fraud alert network. If they are not a member reach out to us anyway. We would love to get you set up.”