Document fraud prevention

How to detect fake ID documents and prevent identity fraud.

Document fraud has become the third largest criminal industry in the world. It costs the global economy billions of dollars each year. They are countless amounts of fraud: to stay in a country illegally, to flee arrest, to steal someone’s identity for profit, to deceive someone, etc.

With the proliferation of digital services and remote onboarding, online document fraud has increased. While governments and organizations that issue identity documents have always implemented security techniques to fight identity fraud, sometimes this is not enough. Fraudsters are developing more sophisticated techniques.

Fraud: what are the risks?

Companies that fall victim to fraud were estimated to incur $42 billion in losses between 2018 and 2020, and consumer fraud is right at the top of that list, with nearly 35% of all fraudulent acts recorded.

Although consumer fraud tends to occur most commonly in the world of financial services and online commerce, it is beginning to affect more sectors and industries as they undergo their digital transformation.

Administrative penalties

Failure to verify the identity and eligibility of a person (client or staff member) can lead to fines, convictions or withdrawal of accreditation.

Financial and material losses

Lapsed contracts, commitment of costs or delivery of materials or services without the possibility of recovering the loss of profit in terms of turnover.

Reputation and brand image

Beyond the financial and administrative risks, fraud can also tarnish the company’s image, and impact the morale of your employees.

Why should you fight document fraud?

With 47% of companies falling victim to fraud in the last 24 months, organizations need to be vigilant and protect themselves against identity fraud.

Our identity document verification service is an effective way to verify ID documents. Autoident is able to detect a false ID document in real time, thereby preventing identity fraud. Read on to discover the most common types of document fraud and learn the risks involved, ranging from simple counterfeiting to identity theft.

What is document fraud?

In banking and the public sector, document fraud is a very real risk, especially in remote identity verification. To counter that, we recommend developing an efficient KYC process.

As well as being troublesome for individuals, identity theft cost businesses, and governments millions of euros every year. To avoid the risk of fraud, it is vital to have processes offering greater security, such as automatic identity checks.

Counterfeiting, the easiest fraud to detect.

Counterfeiting means completely reproducing an identity document in full.

It is usually quite simple to detect counterfeit documents, as they are often poor in quality and rarely contain the security features found in authentic documents. However, as the technical skills of counterfeiters continue to improve, realistic-looking forgeries are beginning to appear.

Counterfeiting is frequently used when creating online accounts. This is why companies must be particularly vigilant when verifying the identity of their customers.

Identity document forgery.

Forging documents includes making changes to an existing ID document.

The changes can be simple (changing a date of birth or expiry date, for example) or more complex. Some fraudsters have even made a specialty of “scrubbing” documents. They produce a blank document from an identity document.  The original document may belong to the forger, or it may be a document stolen from or sold by its legitimate holder.

Forgery is the reason behind significant trafficking in stolen identity documents, and it is sometimes very complicated to recognize them with the human eye. Therefore, it becomes essential for companies to have fraud detection software.

Blank identity document theft.

An ID document is essentially a blank document that is personalized with the holder’s information. When the job of personalization is decentralized, blank identity documents are transported to local authority offices. Fraudsters can intercept the transfer to steal blank documents and personalize them with fake information, producing what is known as a “stolen blank document”.

Identity documents are now mostly personalized at a secure central location to avoid this fraud. But exceptions still exist, including visas. These documents are personalised in embassies and consulates. To detect these types of forgeries, enhanced fraud prevention services are required.

Identity theft protection.

Identity theft cannot be detected by simply checking the document. Identity theft can only be detected by cross-checking.

When creating an online account, it is necessary to develop an enhanced identity check. With our ID verification solutions, we combine ID verification with our facial recognition service to guarantee the identity of the bearer with liveness detection.

Pseudo documents.

A so-called pseudo identity document is a document created from scratch by the counterfeiter, without reference to an existing identity document template. Although it has no legal value, it may sometimes be accepted as an authentic document by a non-expert. Among the best-known pseudo documents include the World Passport.

Fraudulent procurement.

In this last case, detection is more complex, as it is a real document obtained fraudulently. With fraudulent procurement, an initial document is used to produce false supporting documents that are then used to obtain a real document. Such documents are sometimes referred to as fraudulently obtained genuine (FOG) documents. The identities it represents may be invented or stolen.

Avoid fraud risks with IDnow

Whether it’s structured documents (ID card, passport, visa, driving licence, health insurance card) or unstructured documents (proof of address, IBAN, salary slip, etc.), AutoIdent is able to verify the veracity and authenticity of 99% of identity documents worldwide!