The holiday season is often associated with joy, generosity, and connection. Yet, it also marks a peak period for financial fraud and scams. Cybercriminals exploit the surge in online shopping and charitable giving, deploying sophisticated schemes through phone calls, text messages, and emails that promise rewards or threaten consequences.
This is not a seasonal phenomenon; it is a thriving, year-round enterprise. In 2024, consumers reported losses exceeding $12.5 billion to scams, a 25% increase over the prior year. Bitcoin ATM-related fraud alone accounted for $250 million, doubling from the previous year. Older Americans remain disproportionately affected, reporting $4.9 billion in losses—a staggering 43% rise. These schemes range from investment fraud to impersonation of IT support and customer service representatives.
The mechanics of these crimes are depressingly consistent: victims are manipulated into transferring funds or divulging sensitive information. While financial institutions deploy advanced technologies to mitigate these risks, one enduring solution remains remarkably effective: personal relationships. Consider the timeless image of George Bailey in It’s a Wonderful Life, whose deep familiarity with his customers exemplifies a principle that is as relevant today as it was in 1946: knowing the individual matters.
Recent research has underscored this point. A Forbes survey revealed that more than 80% of consumers prefer personalized services. Beyond convenience, personalization can serve as a critical safeguard against fraud.
Credit unions embody this advantage. For over a century, their cooperative, community-based model, founded on the principle of “people helping people,” has fostered close member relationships. This proximity enables staff to recognize changes in behavior, apply fraud-detection training, and intervene decisively.
We have many examples to point to. At Y-12 Credit Union in Tennessee, tellers prevented a member from withdrawing a large sum to purchase bitcoin for a scammer posing as a government agent. Achieva Credit Union in Florida thwarted a scheme involving a fraudulent plea for bail money. In New York, Community Resource Credit Union stopped a $30,000 withdrawal intended for criminals who convinced a member his account had been compromised.
Some institutions have gone further. Armco Credit Union launched a multi-channel fraud-prevention campaign that saved members over $357,000 in a single year. In certain cases, credit unions have even assisted law enforcement in apprehending perpetrators. These interventions are not isolated; they are occurring nationwide, from Oklahoma to Michigan to Massachusetts.
Yet, as credit unions emphasize, the first line of defense is an educated consumer. Understanding the distinction between fraud and scams is essential. Fraud typically involves unauthorized use of personal data, often resulting in reimbursement. Scams, by contrast, rely on consent (albeit under false pretenses), making recovery far more difficult. Victims should recognize that culpability does not lie with them. As Cornerstone Federal Credit Union in New York notes, scammers are “masters of manipulation, exploiting cognitive biases and emotional responses to bypass natural defenses.”
Their tactics are increasingly sophisticated: leveraging urgency, fear, and empathy; impersonating trusted entities; deploying professional-grade materials; and fabricating social proof through counterfeit testimonials. Emerging technologies, including artificial intelligence, exacerbate these risks by enabling synthetic identities and automating phishing campaigns.
Credit unions advise members to adopt a disciplined approach: pause before acting, verify sources through official channels, avoid unsolicited links, and stop communicating if something seems off.
Ultimately, however, technology and regulation cannot substitute for human judgment. The Y-12 teller who intervened did so because “his story didn’t make sense.” That intuition, rooted in familiarity and trust, remains our most potent weapon against deception. Even in an era defined by algorithms and automation, the enduring value of human connection reminds us that the cooperative model is not merely a business structure; it is a bulwark against harm.
Scott Simpson is President and CEO of America’s Credit Unions.
Read Full Article »