From phishing emails to bogus investment schemes, fraudsters are zeroing in on consumers nationwide – and credit union members are squarely in their sights.

Americans lost a staggering $12.5 billion to fraud in 2023, a 25% jump from the previous year. These losses hit certain groups especially hard: military and veteran families filed nearly 94,000 fraud reports last year (with $477 million in reported losses), and an AARP study found 86% of U.S. veterans encountered a scam in just the past year. Our nation’s seniors are also at risk – one in two adults over 50 has been targeted by financial exploitation, contributing to an estimated $28 billion in elder fraud losses each year.

As Chief Advocacy Officer of the Defense Credit Union Council (DCUC), I find these statistics deeply concerning. But they also strengthen our resolve. We know scammers are getting more sophisticated, but credit unions are responding with equal determination and proactive measures to protect our members.

Fraudsters today are remarkably opportunistic, often preying on those who serve our country or our seniors. Active-duty service members, veterans, and older Americans are disproportionately targeted by scams – criminals exploit the tight-knit trust within military and senior communities to slip past victims’ defenses. Defense credit unions see these threats firsthand. As DCUC has observed in Congressional testimony, our credit unions are often the first line of defense against fraud targeting military families, working daily to shield those who serve from scammers who would exploit their sacrifice. This frontline perspective means credit unions have a clear view of the scam epidemic – and it is indeed an epidemic that’s affecting members of all ages and backgrounds.

The fraud methods are varied, but several stand out as particularly pervasive in targeting credit union members:

• Phishing & Impersonation Scams: Fake emails, texts, or calls trick members into divulging credentials or personal data. Often the scammer poses as a trusted source – impersonating Veterans Affairs officials or offering phony military benefits to exploit the trust in military communities, or pretending to be a member’s financial institution or a government agency. These ploys prey on trust and fear to steal information and money.
• Digital Payment Fraud: As more people use P2P payment apps and online banking, scammers have devised schemes to hijack those transfers. Whether through social engineering on payment platforms or “urgent” fake invoices, criminals manipulate victims into sending money electronically to fraudulent accounts. This rise in payment scams has become so alarming that federal lawmakers are seeking better ways to recognize and avert such scams at a national level.
• Check Fraud: Old-fashioned check scams have surged back in modern form. Fraud rings steal or counterfeit checks, exploit remote deposit capture, and cash out before being detected. These schemes have resurfaced dramatically in recent years, costing financial institutions hundreds of millions of dollars. Credit unions are fighting back – for example, one defense credit union in Florida deployed an AI platform in 2024 that successfully stopped check and card fraud attempts, preventing over $3.5 million in would-be losses.
• Identity Theft & Account Takeovers: Data breaches and phishing attacks feed a black market of personal information that thieves use to hijack accounts or open new loans in someone’s name. We’ve seen scammers use techniques like SIM swaps (hijacking a victim’s phone number) to take over online banking and payment apps. Frequent relocations and deployments can make military families especially vulnerable to identity theft and imposter scams as their personal data changes hands often. Once criminals gain access, they can drain accounts or accrue debts in a member’s name, leaving a devastating aftermath. Credit unions often become the lifeline for these victims, helping them recover and secure their finances again.

Behind each of these scam tactics are real people being hurt – a young servicemember tricked into sending money to a fake emergency, a veteran’s nest egg wiped out by a phony investment, or a grandmother duped by a “tech support” caller. Fraud is no longer limited to isolated bad actors; increasingly it’s driven by organized rings that target multiple institutions and refine their tactics constantly. That makes this fight especially challenging. Yet it’s a challenge credit unions are rising to meet.

Industry-wide, credit union leaders agree: fraud has become one of the most detrimental issues facing consumers and financial institutions today. The consensus is that battling modern scams requires a united front – law enforcement, regulators, and frontline institutions working in unison to build a “resilient, intelligence-driven infrastructure” protecting Americans now and in the future. In short, everyone in the credit union movement recognizes the stakes and is mobilizing to combat fraud on all fronts.

Story continued below…

Credit unions are not taking this onslaught of fraud lying down. Across the country, these member-owned institutions are investing in new technologies, bolstering internal controls, and educating members to prevent scams before they happen. Key elements of credit unions’ anti-fraud strategy include:

• Advanced Fraud-Detection Technology: Credit unions are deploying state-of-the-art tools – from artificial intelligence to machine learning – to spot and stop fraud in real time. For instance, defense credit unions have been early adopters of AI-driven fraud detection systems. Launch Credit Union (FL) recently used AI to flag suspicious patterns and successfully block check and card fraud attempts, saving over $3.5 million that would have been lost. Likewise, large institutions like PenFed Credit Union leverage machine-learning solutions to scrutinize loan applications for anomalies, adding extra layers of security for members. By analyzing transactions at lightning speed, these technologies empower credit unions to detect fraudulent activity before the damage is done – essentially catching the scam in the act.
• Personalized Monitoring by Staff: Technology alone isn’t enough – credit unions capitalize on their close relationships with members. Unlike at megabanks, credit union employees often personally know the people they serve, and this human touch is a powerful asset in fraud detection. Staff at local branches notice when a transaction or request is out of character and can spot red flags early thanks to that familiarity. Many DCUC-member credit unions even have fraud specialists who are veterans or military spouses themselves, uniquely attuned to the types of scams targeting their community. This boots-on-the-ground vigilance has saved countless members from falling victim at the last moment – for example, an alert teller who pauses a questionable wire transfer and gently inquires further might be all it takes to disrupt a scam in progress.
• Proactive Member Education: Perhaps the most effective defense is an informed member. Credit unions devote significant effort to preventing fraud through education and awareness. Many host regular fraud awareness seminars (on bases, in community centers, or via webinars), send out scam-alert emails and text warnings, and even hold in-branch workshops on how to recognize common scam tactics. By empowering our members with knowledge, we amplify the overall fraud defenses – an educated member is far less likely to fall victim to a scam in the first place. These proactive educational programs are especially important for protecting older members who might be targeted by phishing, tech support hoaxes, or “grandparent” calls. DCUC has highlighted the need for “robust education and awareness programs” for veterans and their families, and credit unions collectively provide tools (like account alerts, ID theft protection services, and financial counseling) to help members guard against fraud. In my experience, credit union members genuinely appreciate these efforts – it reassures them that we’re looking out for their best interests beyond just their account balances.
• Collaboration and Information-Sharing: Because fraud schemes often cross institutions, credit unions collaborate extensively with law enforcement, regulators, and each other. Every credit union adheres to strict Bank Secrecy Act (BSA) requirements, swiftly filing reports of suspicious activities and working with authorities to investigate crimes. Through industry anti-fraud networks, credit unions regularly share intelligence on emerging scams – if a fraud ring is hitting in one state, credit unions elsewhere want to know so they can bolster their defenses. We also partner with organizations like the FTC, AARP, and veteran service groups to coordinate community education and scam prevention events. These partnerships expand our reach and effectiveness. DCUC member credit unions, for example, work closely with military base commanders and the Department of Veterans Affairs on joint fraud-prevention initiatives, ensuring messages about new scams reach servicemembers and veterans quickly. This cooperative, “all-hands” approach recognizes that no single institution can fight fraud alone – but together, we can significantly raise the barriers against scammers. As one DCUC letter to regulators put it, “we are not complacent: while fraudsters’ tactics evolve, credit unions are constantly strengthening their defenses through better technology, member engagement, and regulatory partnership.”

Even as credit unions fortify their own practices, we know that truly turning the tide on fraud will require action beyond our walls. This is where advocacy and legislative solutions come into play. A key example is the push for new tools at the federal level to help stop scams before they spread – and here, DCUC has been leading by voice and example on behalf of defense credit unions and our members.

One promising legislative effort now making its way through Congress is the Task Force for Recognizing and Averting Payment Scams (TRAPS) Act. This bipartisan bill, introduced in June, would establish a coordinated federal task force focused specifically on combating payment scams. DCUC worked closely with lawmakers in the lead-up to this bill, and we applaud the senators behind it for tackling the issue head-on. Why does TRAPS matter? Because it would strengthen the systematic response to scams by bringing all the key players to the table – regulators, law enforcement agencies, and industry representatives (including credit unions) – to share data on the latest fraud trends and recommend concrete solutions. Importantly, the task force would include an NCUA (credit union regulator) representative and a credit union industry expert, ensuring our members’ perspective is heard in devising national anti-fraud strategies. In short, this legislation recognizes that stopping fraud “requires the combined expertise of the entire financial ecosystem”, from law enforcement to frontline institutions.

DCUC has thrown its full support behind the TRAPS Act. In our public statement, we noted that “payment scams targeting military families are on the rise, and credit unions are often the first line of defense”. This bill, we stressed, “gives credit unions the tools they need to detect, stop, and report fraudulent transactions before the damage is done”. In practical terms, TRAPS would empower financial institutions to pause suspect payments when fraud is suspected and to work more seamlessly with law enforcement – actions that today can be hampered by liability concerns or lack of inter-agency coordination. By creating clearer safe harbors for institutions acting in good faith to block scams, and by improving information-sharing across agencies, this legislation would help us intervene earlier and more effectively when members are being scammed. DCUC strongly supports this kind of commonsense solution and is urging Congress to advance the TRAPS Act as quickly as possible.

Of course, our advocacy doesn’t stop at one bill. We’re also pushing for tougher enforcement and penalties against the perpetrators of fraud. In letters to lawmakers, DCUC has recommended directing the Department of Justice and others to prioritize going after those who defraud seniors and servicemembers, including harsher penalties for criminals who target military or elder communities. Financial predators must know that exploiting our veterans or grandparents will bring serious consequences. We’ve likewise supported efforts like the Senior Safe Act and the Stop Senior Scams Act, which encourage better reporting of elder fraud and training of employees to spot exploitation. And importantly, we caution policymakers to avoid any changes that might inadvertently hamstring credit unions’ ability to protect members. For example, proposals that force payment networks with weaker fraud controls, or broad mandates that don’t distinguish legitimate scams, could diminish existing fraud safeguards. DCUC’s message is that new laws should build upon – not undermine – the strong fraud mitigation frameworks community lenders have developed.

All these advocacy efforts boil down to a simple goal: ensuring credit unions have the backing and tools to keep their members safe. Whether it’s working with regulators on better rules, pressing Congress for laws like the TRAPS Act, or partnering with organizations like AARP on consumer education, DCUC is actively engaging on every front. We know collaboration is key. That’s why we’ve offered to serve on any interagency task forces and to share the on-the-ground insights from our member credit unions’ fraud teams. Lawmakers and regulators have an open invitation – you have in DCUC and the credit union movement a willing partner and resource to develop effective, common-sense policies that protect consumers. We truly are all in this fight together.

Financial fraud is a constantly evolving threat – but so is our resolve to combat it. Every day, credit unions demonstrate that protecting our members’ financial well-being is at the core of our mission. We’re investing in smarter systems, training our teams, and educating our communities, all to stay one step ahead of the bad guys. And we’re championing reasonable laws and partnerships that enable us to do even more. As fraudsters become more sophisticated and transnational in scope, it’s imperative that our defenses and solutions match that scale.

Credit unions, especially those serving our military and veteran communities, remain on the front lines of this fight. We know what’s at stake when a family’s savings or a senior’s retirement is on the line. Our message to members is clear: We have your back. You should never feel alone or unprotected in the face of scam threats. As I’ve said before, fraud and financial scams are a scourge that no one – least of all our military heroes and senior citizens – should have to face alone. Credit unions will continue to innovate, educate, and advocate to ensure they don’t have to. The criminals may never stop trying, but together, neither will we. Our members have earned our trust, and we intend to keep it by guarding them against fraud today and for the long haul.