Card Fraud (Updated 8/7/08)
President's Letter (Updated 7/23/08)
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Card Fraud
To date, members of Viriva Community Credit Union can sleep soundly knowing that we have not had any notification of ATM and/or Credit Card fraud. Below is a news article detailing an identity theft case from compromised card data at other financial institutions. In the event the Credit Union was notified of any type of card compromise, we would take immediate and necessary action to notify our members and the steps they should take.
BOSTON (8/6/08)--Eleven people have been charged with stealing more than 40 million credit and debit card numbers obtained from TJX Cos., BJ's Wholesale Club Inc., and seven other retailers. They were indicted Tuesday, in what the Justice Department calls the largest, most complex identity-theft case ever prosecuted (ComputerWorld.com, CNNMoney.com and Bloomberg.com Aug. 5).
Thousands of credit unions and their members were among those impacted in the thefts. Credit unions and other financial institutions were forced to reissue compromised cards and endure costs related to fraud. Some of the breaches sparked lawsuits by credit unions and by their insurance companies.
The identity theft ring targeted nine U.S. retailers, including TJX, BJ's, DSW Shoe Warehouse, Office Max Inc., Boston Market, Barnes & Noble Inc., Sports Authority, Forever 21, and Dave & Buster's restaurants. Participants in the ring installed "sniffer" programs on the retailers' networks, allowing them to collect credit card and password information, said Michael Sullivan, U.S. attorney for the District of Massachusetts.
Three people in Boston are charged with hacking into the retailers' wireless computer networks and installing sniffer. They allegedly concealed the data in computer servers they controlled in Eastern Europe and the U.S.
The Justice Department said the charges allege the defendants sold the data over the Internet to others who encoded the stolen information on blank cards and used those cards to withdraw tens of thousands of dollars at a time from ATM machines (The New York Times Aug. 5). They laundered their proceeds through using anonymous Internet-based currencies and channeling funds through bank accounts in Eastern Europe.
Eight people were charged in San Diego with operating an international distribution ring of stolen debit and credit cards. One defendant allegedly received $11 million in proceeds from selling stolen information. Three of the people charged are U.S. citizens. Others are from Estonia, Ukraine, China and Belarus. Some of the defendants will face identity theft charges in New York for hacking into the restaurant chain's computer network.
Prosecutors say the scheme was spearheaded by Albert "Segvec" Gonzalez, a Miami man who is being held in jail on the New York charges. He is charged with computer fraud, wire fraud, access device fraud, aggravated identity theft and conspiracy. (Article taken from www.pcua.coop)
President's Letter
Given the recent headlines surrounding the government’s seizure of IndyMac Bank and concern over the financial stability of both FNMA and FHLMC I want to let you know that your Credit Union is in excellent financial condition.
As of June 30, 2008 our year to date net income is in excess of $136,000, assets have increased 6.99% on an annualized basis and net charge offs to average loans is a mere .54%, with loan delinquencies under close scrutiny and strict control. Our capital position is rock-solid, as evidenced by our net worth to asset ratio of 13.95%, which is almost double the regulatory target level of 7.0%.
Note that your share accounts are federally insured by the National Credit Union Share Insurance Fund (NCUSIF), an arm of the National Credit Union Administration (NCUA), up to $100,000, while retirement accounts, such as IRA’s, are separately insured up to $250,000. Your shares and savings are not only insured by this federal fund, but the fund is also fully backed by the U.S. government.
Each year our institution is subject to both state and federal examinations. Having had recently gone through our state examination you can sleep well knowing that we received a very high rating from our regulators. In addition to examinations by the Pennsylvania Department of Banking and the National Credit Union Administration we also have a third party CPA firm perform an audit on behalf of our Supervisory Committee each year.
The bottom line is that your Credit Union, which is a true not-for-profit financial cooperative, continues to be a safe haven for your funds and an attractive alternative in today’s turbulent economic environment.
James F. McCaw
President/CEO
July 2008
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