Have you ever received a letter from an auditing firm asking you to confirm your account or loan balances? This is called member verification.
A financial institution’s supervisory committee is responsible for overseeing an Annual Opinion Audit of your credit union. Usually these are done after the fiscal year end. Part of this audit process is to conduct member verification’s on accounts.
There are two ways to conduct member verification. It will either be a negative confirmation or a positive confirmation.
The auditing firm completes a negative confirmation by mailing a verification letter (usually on credit union letterhead) to randomly selected members, but not to the entire membership. These selected members are asked to verify the indicated statement balance, and if the balances and information listed are correct, no further action is required by the member. However, if they feel there is a discrepancy, they are instructed to list the discrepancy, sign and date the form, and return the letter to the auditing firm. The auditing firm will then look into the issue further.
A positive confirmation is very similar to a negative confirmation but requires different action on the member’s part. The auditing firm will send out verification letters (again usually on credit union letterhead) to randomly selected members, but not to the entire membership. The member will be asked to verify their account balances and indicate whether the balances listed are correct or incorrect. Either way they are to sign and date the form and return it to the auditors. If there is a discrepancy, they are asked to note it on the form. In a positive confirmation situation, the auditors expect to receive correspondence back from all members participating.
Now that you know what member verification is, you can feel comfortable understanding how to handle a request and help ensure that your financial institution has all the correct information.