By Ray Birch
NEW ORLEANS—As headlines warn of deepfakes, AI voice clones and synthetic account takeovers, a quieter threat is walking through credit unions’ front doors.
Despite the financial services industry’s intense focus on digital fraud, in-branch fraud is rising in 2025 — and many credit unions may not fully grasp the scale of the exposure, according to Jillian Kossman, COO of IDScan.net, which provides identity verification technology to banks and credit unions.
“Roughly 50% of the fraud we’re seeing is still happening in branch using stolen identities and fake IDs,” Kossman said. “There’s been so much investment in digital account opening and digital account takeover prevention. That same level of attention hasn’t been paid to the branch.”
Kossman said IDScan’s data show a noticeable uptick in fraud attempts in 2025 compared with 2024, following a smaller increase the prior year. The trend, she noted, often moves countercyclical to the broader economy.
“When the economy tightens, when people have less money in their wallet and the price of goods is going up, that’s when we see fraud skyrocket,” she said. And while digital threats dominate conference agendas, “IRL — in real life — is still many banks’ and credit unions’ biggest threat vector.”
Check fraud remains the top in-branch concern, ranking roughly 15% higher than the next-highest category among IDScan’s customers.
“The rumor of checks’ death has been greatly exaggerated,” Kossman said. “A confident fraudster with a convincing fake ID can still walk out with thousands of dollars. Identity fraud — including impersonating an existing member — follows close behind. While member impersonation in mobile apps appears to have dipped slightly, physical impersonation remains common.”
New survey data from IDScan.net underscore the financial impact. Among 15 banks and credit unions surveyed — ranging from $500 million to more than $10 billion in assets — 53% reported measurable in-branch fraud losses over the past 12 months. Among those institutions, the average annual loss was $4 million.
Notably, 67% cited in-branch fraud as a concern, double the level of online fraud concerns (33%). Individual incidents may involve $5,000 fake checks or $15,000 certificate withdrawals, Kossman said, “but they add up quickly.”
Organized Fraud Rings
Compounding the risk, she added, is a shift from lone scam artists to organized fraud rings targeting multiple institutions within a region. These groups often use high-quality counterfeit IDs, synthetic identities built from legitimate credit profiles, and materials that closely mimic official Department of Motor Vehicles documents.
“Most credit unions think sophisticated fraud is happening digitally,” Kossman said. “But it’s also happening physically.”
Many smaller credit unions, she said, still rely primarily on teller training and printed ID guides rather than real-time ID authentication technology — what she calls “cybersecurity for the real world.”
Just as concerning, she added, is the lack of consistent escalation procedures. Without clear policies and firm processes, frontline staff may hesitate, giving experienced fraudsters the opportunity to manipulate the situation.
Perhaps the biggest blind spot is visibility. Kossman said many institutions lack a centralized, enterprise-wide view of fraud attempts across branches.
“They might hear about one incident at one location, but they don’t have a bird’s-eye view,” she said. “In an era dominated by digital threats, that gap could leave credit unions underestimating a risk that is not only persistent — but growing.”