Independent Banker - January 2021 - 30

PORTFOLIO
It really comes down to educating
customers, too. "
Getting help to customers
Customers of $551 million-asset Bank
of Idaho in Idaho Falls, Idaho, have
also been used as money mules, says
president and CEO Jeff Newgard.
Fraudsters have tried to steal a total
of $228,000 from 13 Bank of Idaho
accounts, but the community bank
caught it before any funds were lost,
Newgard says. The fi rst line of defense
is following know your customer
(KYC) procedures.
" We're getting a transaction from
a customer in Virginia, but we're in
Idaho. Does that make sense? Then
we take a look at why we're getting
that transaction, " Newgard says, " and
we also have good systems in place
for identity checks and reviewing a
pending transaction before any ACH
funds leave the bank. "
UI fraud is not the only scam the
bank's customers are being subjected
to because of the pandemic. Others
are targeting customers who are out
of work and in need of fi nancial help.
Whether it's a UI scam or another
type, community banks are poised to
help. " We have a pull-up-a-chair policy
anytime a customer has a problem,
encouraging them to tell us their
needs, " Allen says. " If it's a person who
has been laid off but hasn't received
their unemployment insurance check
for a couple of months, we might do
a small personal loan using paid-off
vehicles as collateral. "
" During times like this, we
double down on education, not
only internally with our staff , but
externally with our customers, "
Newgard adds. " That's where we can
really add value by helping people
avoid these scams. " 
Katie Kuehner-Hebert is a writer
in California.
8 unemployment fraud red flags
Criminal actors and other perpetrators are siphoning
unemployment benefits. According to the U.S. Secret Service,
here's what receiving depository financial institutions (RDFIs)
should look out for:
1. Accountholder name and ACH " remit to " name do not match
2. Total unemployment deposits are more than $5,000 per month
3. Unemployment deposits are paid to an accountholder
residing outside of the issuing state
4. The customer's account(s) receives both deposits of
unemployment insurance (UI) and regular work-related
earnings, such as paycheck deposits
5. Multiple UI payments deposited into one account from the
same issuing state or from multiple issuing states
6. Unemployment deposits into one account intended for
multiple unemployment benefit recipients
7. Deposited funds are quickly diverted via wire transaction to
foreign accounts, particularly to accounts located in countries
with poor anti-money laundering (AML) controls
8. The customer's account behavior seems atypical for someone
receiving unemployment benefits
Financial institutions that receive ACH transactions from
fraudulent unemployment insurance benefit applications
should preserve and return these funds in accordance with AML
obligations and relevant banking laws and procedures. RDFIs
should work with the originating depository financial institution
and NACHA to preserve and return funds from fraudulent
unemployment insurance applications.
30 Q ICBA Independent Banker Q January 2021
Independent Banker - January 2021

Table of Contents for the Digital Edition of Independent Banker - January 2021
