By Kris Bishop, CEO of FIntegrate Technology
The financial industry is experiencing a rise in fraudulent activity, creating significant operational challenges for credit unions nationwide. With global chargeback volume predicted to reach 324 million transactions in 2028, a double-digit increase over the 2025 forecast of 261 million, credit unions must change their approach to dispute management, critical to both maintaining member satisfaction while protecting their bottom line.
Understanding the True Impact of Rising Fraud
This challenge extends far beyond simple transaction volume increases. According to the 2024 State of Fraud Benchmark Report from Alloy, 79% of credit union and community bank decision-makers reported fraud losses exceeding $500,000 in 2023, the highest segment surveyed. Meanwhile, the Federal Trade Commission (FTC) received approximately 2.6 million fraud reports last year, essentially unchanged from 2023. However, consumer losses increased sharply, totaling over $12.5 billion, up 25% from 2023.
In 2025, fraud trends are shifting dramatically, driven by evolving technologies and emerging schemes. Insights come from LexisNexis Risk Solutions’ 2025 Cybercrime Report, analyzing over 104 billion transactions processed in 2024, found that first-party fraud – including chargeback and bonus abuse – jumped from 7.6% in 2023 to 30.4% in 2024, making it a predominant form of attack. Third-party fraud, such as account takeover, now represents ~30.5% of all fraud cases.
Credit unions face a perfect storm of rising chargeback volumes, with the value of global chargebacks set to rise from $33.79 billion in 2025 to $41.69 billion in 2028, a 23% increase in just three years. This is further compounded by inefficiencies in traditional manual dispute processes that create bottlenecks, delay resolution and erode member trust.
The Financial Brand recently noted, “Fraud and scams are rising rapidly, placing greater pressure on financial institutions to counter increasingly sophisticated threats,” citing 290,000 identity theft cases and 117,000 credit card fraud incidents in Q3 2024 alone, based on data from the FTC. “Credit union leaders are increasingly concerned about the prevalence and impacts of fraud and scams – on their members and their business,” according to Filene Research, noting that 41% of credit union members were fraud victims in 2023, compared to 36% of non-members. When members experience fraud, their perception of a credit union’s response – speed, transparency, and funds restoration – defines the relationship. Manual internal systems often fail to meet these expectations, risking permanent damage to member loyalty and increased losses to the credit union.
The operational costs associated with manual dispute processing can also be substantial. Staff members must manually track each case, coordinate data entry and updates with multiple systems, and ensure regulatory compliance throughout the process. This approach not only drains resources but also introduces the potential for human error that can compromise case outcomes or create compliance violations and increased losses. Adding to this challenge, Deloitte’s Center for Financial Services predicts fraud losses could exceed $40 billion by 2027 due to generative AI, which may magnify the risk of deepfakes and other banking fraud. This will further strain credit union staff and budgets.
Regulatory Compliance in a Complex Environment
Beyond operational efficiency concerns, credit unions must navigate an increasingly complex regulatory environment surrounding dispute management. For instance, the NCUA’s 2025 Supervisory Priorities emphasize managing credit and cybersecurity risks, as loan delinquencies hit their highest since 2013 and credit card portfolio performance deteriorated beyond global financial crisis levels.
Regulatory requirements demand precise documentation, adherence to specific timelines, and comprehensive record keeping that manual processes often struggle to maintain consistently. The consequences of compliance failures can be severe, including regulatory penalties, member compensation, and reputational damage that extends far beyond individual cases. Credit unions need systems that not only automates the processing of disputes efficiently but also ensure regulatory standards from initiation through resolution.
Technology Solutions for Modern Challenges
Forward thinking credit unions are recognizing that technology solutions offer the most viable path to addressing these rising challenges. Automated dispute management systems can transform how institutions handle fraudulent transaction claims while maintaining the high level of member service that credit unions are known for.
John Dearing, a managing director at Capstone, an advisory firm for credit unions and CUSOs, noted in a recent article, “By leveraging a CUSO’s expertise, relationships, and anti-fraud infrastructure, credit unions gain access to ready-made solutions – such as managed security services, real-time threat monitoring, and biometric authentication.” The same can be argued for financial technology providers.
Comprehensive dispute management platforms offer automated tracking capabilities that eliminate the manual processes that create delays and errors. These systems can handle all transaction types, from traditional card purchases to emerging payment methods, ensuring consistent processing regardless of the dispute’s origin.
Customizable workflows enable credit unions to maintain their unique operational approaches while ensuring regulatory compliance throughout every case. Rather than forcing institutions to adapt their processes to rigid software requirements, modern platforms allow credit unions to configure systems that support their existing member service philosophies.
Centralized management capabilities replace fragmented manual processes with unified platforms that provide complete case visibility. Staff members can access all relevant information from a single interface, eliminating the need to coordinate between multiple systems and reducing the potential for communication gaps that can delay resolution.
Integration and Operational Efficiency
The most effective dispute management solutions integrate seamlessly with existing core banking systems. This integration eliminates duplicate data entry, reduces processing time, and ensures that member account information remains current throughout the dispute resolution process.
Real time reporting capabilities provide credit union leadership with the insights needed to identify trends, allocate resources effectively, and make strategic and financial decisions about fraud prevention initiatives. These tools can help institutions proactively address emerging fraud patterns before they significantly impact operations.
Preparing for Continued Growth
Highlights from the NCUA’s Quarterly Data Summary Report for the fourth quarter of 2024 was good news for credit unions. The credit union system’s net worth increased by $14.2 billion, or 5.9 percent, over the year to $255.3 billion.
“The growth in assets and insured shares is good news and reflects the strength and resiliency of the credit union system when operating within a mixed economic environment,” NCUA Chairman Kyle S. Hauptman said in a March press release. “The NCUA is closely watching interest rates, delinquency rates, and inflation and their effects on the economy. Credit union managers and directors should prepare for a variety of interest rate scenarios and economic conditions.”
However, as fraud becomes increasingly sophisticated, credit unions must also position themselves for sustained growth in dispute volume. The institutions that invest in comprehensive technology solutions today will be best equipped to maintain member satisfaction while managing operational costs effectively.
The key to success lies in recognizing that dispute management technology is not simply about processing transactions more efficiently. It represents a strategic investment in member relationships, operational resilience, and competitive positioning in an increasingly challenging financial services environment.
