Why document verification is the first line of defence against ID fraud

Find out how to use document verification as part of a layered approach to identity proofing.

What’s at stake when it comes to document and identity fraud?

Turns out, quite a lot. Around one in three US adults have been victims of identity fraud. And it also costs big. Fraud currently costs the economy $5 trillion globally a year.

As a business, you need to ensure that bad actors aren’t accessing your products and services. But you also don’t want to deter genuine customers. If your onboarding process is time-consuming or cumbersome, this will put people off.

You have to strike that perfect balance. The convenience and speed your customers want. And the security and scalability your company needs.

So what can businesses do to protect themselves and their customers?

The benefits of document verification

You may be familiar with the process of document and ID verification. It’s something that banks and other businesses have done for decades. But you might only be used to validating an ID in a physical environment. This creates friction for customers, slows down the process, and prevents your business from scaling.

A digital document verification solution allows you to validate your customers’ IDs remotely. It’s a streamlined way to check if an ID is genuine, as part of a remote onboarding process. This scales and increases the efficiency of your ID checks. It protects your business from fraudulent IDs, while making life easier for your customers.  

The problem is, many businesses do not have the resources, the expertize, or the technology to implement advanced document verification. There are many different types of document fraud, and each one needs a different method of detection. It takes time and money to identify the different types of fraud, and to catch them. 

This is where a sophisticated document verification solution can help.  

Categorizing the different types of document fraud 

So what’s the benefit of a document verification solution? 

First, let’s get some perspective on the different types of document fraud.

Fraudulent documents can be categorized into three different groups: 

  • Modified documents: these are created when a fraudster alters an original, genuine document

  • Illegitimate documents: these are completely false creations

  • Falsely represented documents: these can be legitimate or original, but they don’t belong to the person presenting them

Each of these different groups then contains their own type of fraudulent documents. For example, there are two different types of modified documents—forged documents and blank stolen documents. You might be wondering: is it even possible for a fraudster to get their hands on blank documents? Turns out, it is. Back in 2008, thieves made away with 3,000 blank passports and visas

Illegitimate documents generally come in three forms: counterfeit documents, compromized or sample documents, and fantasy or camouflage documents. Ever heard of the Republic of Texas? Neither had we, until it showed up on a fraudulent document. 

Finally there are two types of falsely represented documents: fraudulently obtained documents and imposter documents. This is also the most difficult type of ID fraud to detect without sophisticated identity verification software. 

As you can see, it quickly becomes complicated. Not only are there many different ways fraudsters tamper with documents, there are also millions of different IDs out there, from hundreds of different countries. Each one looks different, and has different security features. 

Companies like Onfido that specialize in identity verification have the expertize and the knowledge to identify the different types of fraud. This is what we do. We have the technology in place to support thousands of different document types, and to detect whether or not they are fraudulent. 

So how do we do this?

Using document verification to detect the different types of ID fraud

As each type of ID fraud is different, you need a variety of different approaches to catch as many of them as possible.

For example, the best way to identify modified documents is to look for data consistency. This includes checking the document registration number, expiration date, date of birth, gender, and other encoded data is present on all areas on the card.

Visual document authenticity analytics can prevent illegitimate documents from slipping through the cracks. By comparing documents against templates, we can ask if things match up as they should.

When it comes to falsely represented documents, things get a bit more difficult. Proof-of-ownership verification is the only way to truly combat these types of fraud. So, while document verification has its benefits, it will be less effective at catching fraud when used as a stand-alone solution. After all, it only proves that an ID is genuine. It cannot verify the identity of the person using that ID. 

Combining document checks and biometric verification

The best detection for fraud like falsely represented documents is to compare a digital image or video of the user to the image on the ID card. A document check plus a facial check verifies that the document is genuine, and is tied to the person presenting it. We believe this should become the standard for identity verification, as it is one of the most effective ways to eliminate most types of fraud.

To discover the latest fraud trends and how to protect your business, read our Identity Fraud Report.

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