The Credit Union Times recently posted an article where an employee of a small California Credit Union embezzled $1.2 Million from dormant accounts. The former employee was able to transfer funds from dormant accounts to accounts that were controlled by her and her husband. This lead to the eventual closing of the Credit Union in 2007.
As part of the daily monitoring that AuditLink offers, here are a few suggestions that may help reduce or eliminate abuse of dormant accounts at your Credit Union:
- Monitor dormant activity reports daily (PDRMTR report in CU*Spy).
- Watch for large transaction, both deposit and withdrawals, to review for atypical activity.
- Verify signatures to ensure the member was the actual patron.
- Create a segregation of duties policy. You should not have individual performing transactions on dormant accounts also updating their dormant status.
For the full article, following the link below.