All credit unions have to battle fraud these days, but in Spokane, Wash., a few credit unions are taking the fight to a new level — some of their employees are becoming commissioned fraud investigators with the local police department.
The move — done in partnership with the Spokane Police Department — dramatically increases the chances of apprehending fraudsters, according to Mark Smith, who is CEO of Sears Spokane Employees Federal Credit Union and a commissioned fraud investigator. That credit union has $5 million in assets and about 600 members.
“When you’re commissioned, it gives you the ability to interact with law enforcement on a different level,” he explained.
Smith said he’s able to file police incident reports directly and has access to more police investigation tools. He doesn’t have a badge, but he does carry a police-issued ID.
Since becoming commissioned, Smith’s been able to nab check thieves and other criminals that have crossed paths with his credit union. One of his favorite cases involved a member victimized by debit card fraud.
“By tracing back the transactions and getting video footage and still pictures from the ATM machine that she was using, we were able to establish that it was her daughter,” he said. “We had pictures of the car she was driving. Just everything.” he added.
Mark Smith isn’t the only commissioned fraud investigator in town, according to Spokane Police Department Lieutenant Dan Ervin. Many others have gone through the police department’s program, which includes 80 hours of instruction on state law, police report writing, investigation tools and other skills, as well as testing and a background check. Now over a decade old, the program was first directed at retailers and security people but expanded over the years, Ervin said.
The commission does provide credit unions with more investigative power, but it’s no free pass to play police officer, Ervin warned.
“With the limited commission, you have limited access to our records department, which helps [investigators] identify individuals. We can share some documents with them. We might be able to share photos that commonly we would not share with a non-commissioned investigator,” he explained. “It does give them some access. doesn’t give them complete access, but they have to go through our records department and identify themselves, and even at that there’s only a select number of things they can have access to.”
Nonetheless, the partnership often creates a win-win situation, Ervin said.
“Those investigators have direct access to their own files. They have the time to be able to put more thorough cases together. By the time those cases come to our department, it’s almost wrapped in a bow,” he said. “That cuts down the amount of time our investigators have to work to put a case together…credit unions aren’t sitting there waiting for us to do their investigation. I think you get a quicker turnaround on it.”
It also helps member victims — especially those turned over to collections because of someone else’s fraud, Smith added.
“Because I’m able to issue that report number and do that incident report, they can always go back to that collection agency and say, ‘No, no, no, no. This was fraud. It was reported to the police. Here’s my report number. Here’s a copy of the incident report. Here is the perpetrator,’” he explained. “It makes it easier for them to clear up the quagmire that’s created by fraud and ID theft.”
That’s one reason Smith said he makes members aware that he’s a commissioned fraud investigator.
“It gives them a sense of security,” he noted.
“When [fraud] does happen to you, your first thought is okay, well wow, where do I start? It gives them that resource to be able to just call me up and say, ‘Hey Mark, this happened. Where do I go? What do I do?’”
Ervin said credit unions interested in commissioned fraud investigator programs should start local.
“First of all, find out if your state supports it,” he advised. Each state has different laws about who can obtain limited commissions, he said. “Then secondly, you’re eventually going to have to get the okay of a chief or a sheriff. I would approach them, talk to them about the idea. They’re going to have to talk to their legal department, or should talk to their legal department, on how they want to put it together. There is a lot of potential here, but there’s a lot of moving parts that have to get put in play.”
