Here’s an uncomfortable truth: sometimes the fraud call is coming from inside the house.
Velera, the country’s leading payments credit union service organization, just dropped a new resource that tackles one of the trickiest problems in financial services—what to do when your own members are involved in fraudulent activity, whether they know it or not.
The Consumer-Engaged Fraud Case Management Playbook is designed to help credit unions navigate the murky waters of consumer-engaged fraud (CEF). Think of it as your roadmap for those cases where the cardholder isn’t exactly innocent, but might not be entirely guilty either.
Why This Matters More Than Ever
Consumer-engaged fraud isn’t your garden-variety stolen credit card situation. According to Alloy, over two-thirds of financial institutions have seen CEF cases climb, and 35% are dealing with more than 1,000 fraud attempts every year. That’s a lot of questionable transactions.
The tricky part? CEF involves actual cardholders who either got duped into sketchy activity or are deliberately gaming the system. It’s the difference between someone stealing your wallet and someone “borrowing” their own credit card for purposes that would make a compliance officer sweat.
From Identification to Investigation
Velera already created a Consumer-Engaged Fraud Classification Guide to help credit unions spot and categorize different CEF types—misuse, persuaded fraud, and the newly identified collusive merchant fraud. This new playbook picks up where that left off, moving from “what is this?” to “what do we do about it?”
Here’s what credit unions get in the playbook:
- Step-by-step case management guidance: A clear workflow and investigation checklist so your team isn’t reinventing the wheel with every suspicious claim
- Filing best practices: Real talk about when to file a chargeback, when to walk away, and how to stay compliant without eating unnecessary losses
- Real-world case studies: Actual examples of different CEF scenarios, because theory only gets you so far
- Practical tools: Checklists and resources your fraud, risk, and dispute teams can actually use day-to-day
Context Is Everything
“As consumer-engaged fraud continues to evolve, credit unions can’t rely on the same signals and assumptions they use to evaluate traditional fraud,” explains Nicole Reyes, Velera’s Managing Vice President of Risk Operations. “An authorized transaction doesn’t necessarily mean the member acted knowingly, and a disputed transaction doesn’t necessarily mean the member was a victim.”
Translation: you need to look at the whole picture. What led up to that transaction? Was your member romance-scammed into sending gift cards? Did they dispute a legitimate purchase hoping for a refund? The transaction itself only tells part of the story.
“Credit unions need to understand what happened around the transaction, not just what happened during it, so they can protect members, manage losses and make decisions they can stand behind,” Reyes adds.
In other words, this playbook is about giving credit unions the confidence to make tough calls on complicated cases—protecting genuine victims while not becoming an easy mark for bad actors. Because in the world of consumer-engaged fraud, nothing is ever quite as simple as it seems.