LibraryblogCombating threats: Business-centric strategies for identity fraud protection

Combating threats: Business-centric strategies for identity fraud protection

Identity fraud is a growing threat that demands robust protection strategies. High-profile cases like the Tinder Swindler highlight the need for vigilance. This article explores the nuances of identity fraud and theft, and how businesses can safeguard sensitive information.

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Iryna Bondar
Senior Fraud Group Manager
June 5, 2024
Fraud Prevention
On this page
1. What are identity fraud and identity theft?
2. What are the signs of identity fraud?
3. How can businesses prevent identity fraud?
4. The IDV advantage
5. What are the limitations of identity fraud prevention measures?
6. The Veriff approach

The Tinder Swindler on Netflix took the world by storm. In the show, Simon Leviev posed as a wealthy, jet-setting diamond mogul, wooing women he met online. He then conned them out of around $10 million in a complex Ponzi scheme.  

This may be an extreme example, but it exposes the dangers that identity fraud – and identity theft – can pose to consumers online. 

1. What are identity fraud and identity theft?

Identity fraud and identity theft pose severe consequences for individuals and organizations around the globe. According to the US Department of Justice, the two terms are “used to refer to all types of crime in which someone wrongfully obtains and uses another person's personal data in some way that involves fraud or deception, typically for economic gain”.

While identity theft and identity fraud are closely linked, there are important distinctions. Identity theft refers to the unauthorized acquisition of personal information, such as someone's name, Social Security number, or credit card details, without their consent. The victim doesn’t even need to be alive – crooks will happily steal the details of the deceased.

Identity fraud encompasses a broader spectrum of crimes that go beyond simple information theft. It involves using stolen details to commit financial fraud or other illicit activities by impersonating the victim or fabricating a false identity. In fact, the identity can be totally fictitious as well. This fictitious identity may not resemble an actual person but is crafted with realistic personal details.

2. What are the signs of identity fraud?

If you’ve become a victim of identity fraud, you’ll likely notice that:

  • There’s suspicious activity on your credit card and bank statements
  • There’s something inaccurate on your credit report
  • Unfamiliar devices have gained access to your online accounts
  • You can no longer access your online accounts
  • You’re receiving suspicious phone calls, voicemails, texts, or emails
  • You’re receiving unexpected mail or some of your expected mail is missing
  • Your personal documents have been lost or stolen

It’s a scary situation, but there are ways that customers can keep their information safe and prevent identity theft. For example, they should refuse to share personal information on social media; choose complex and unique passwords for each online account; and be careful on public wi-fi or securing their home wi-fi. 

It’s vital, of course, to protect your personal information. But businesses – especially financial institutions – bear a key responsibility to deter fraudsters.

3. How can businesses prevent identity fraud?

Identity theft and identity fraud can have devastating consequences for individuals, but they also affect businesses around the world. If a business fails to protect sensitive information or unknowingly permits a fraudster, it may face significant fines and repercussions for not meeting know its customer (KYC) regulations. It could also face regulatory and legal consequences in other areas.

Perhaps even more seriously, its reputation for customer security could be destroyed – with all the financial consequences that entails.

4. The IDV advantage

So how can businesses take the fight to the fraudsters?

Identity verification (IDV) solutions are a powerful ally, enabling swift and accurate detection of fake IDs, verification of document authenticity, liveness detection, and mitigate velocity attacks. 

This may sound complex, but it doesn’t need to be. Simplifying the identity verification process can enhance the user experience while ensuring stringent security measures. IDV software can make the process swift, efficient, and accurate. 

With the help of IDV software, you can:

  • Detect fake and tampered IDs
  • Extract and verify document data
  • Make it easy for users to prove their fake identity

5. What are the limitations of identity fraud prevention measures?

Fraud prevention is a complex field. Perhaps most significantly, criminals don’t sit still. On the contrary, they continuously evolve their techniques, embracing new technologies and approaches in their efforts at identity theft and identity fraud. 

And there are other challenges. Prevention measures often rely on user compliance; it’s vital to ensure they’re easy to follow and convenient. There could also be wider concerns about privacy, which providers must address. 

In addition to considering biases related to age, race, and gender, Identity Verification (IDV) must account for specific scenarios where bias can occur, such as the type of identity document or personal device an individual uses. For instance, not everyone can afford the latest high-spec mobile phones capable of capturing high-resolution images. At Veriff, we support a wide range of identity documents and devices and continue to broaden our offerings to ensure more genuine individuals can be verified online.
Veriff operates across various countries and industries, meaning our IDV solutions must be accessible to a diverse population. As part of our quality assurance processes, we consistently monitor the performance of our solutions with different groups, ensuring equitable results for all, such as verifying that our services perform equally well for both men and women.

It's also important to acknowledge any biases or affiliations that may influence the perspective or recommendations provided. For instance, some providers of IDV tools may emphasize the effectiveness of technological solutions while potentially underplaying the importance of user education or the role of regulatory frameworks in preventing fraud.

6. The Veriff approach

Veriff’s IDV solution is built on AI-powered automation and deep domain experitse. Our extensive document coverage supports more than 11,500 identity documents in over 230 countries and territories. To prevent fraud, Veriff utilizes machine learning powered checks, advanced fraud network mitigation strategies, and our team of in-house experts to help protect your organization against fraud.

We are committed to fighting identity fraud. Our recent work provides enhanced detection techniques, comprehensive compliance solutions, and user-friendly identity verification. For example:

  • Our Fraud Protect package helps mitigate the threat of impersonation, synthetic identities, and identity document fraud, among other dangers. We use CrossLinks to uncover fraud patterns and provide access to our in-house fraud experts
  • The Fraud Intelligence offering expands this offering, offering a RiskScore to determine the risk associated with an IDV session, among other tools
  • We take a holistic approach. For example, our efforts to educate the public and their customers through the Fraud Education Center, alongside real-time intelligence and tailored solutions, demonstrate a holistic approach to combating fraud

These efforts are rooted in expertise and continuous innovation. The collective work of Veriff's fraud prevention team reflects a commitment to excellence and adaptability in the face of evolving digital threats.

If your business would like to know more about how to prevent identity fraud and the steps it can take to stop bad actors from accessing its services, book a consultation with Veriff today. We’ll explain exactly how we can help you to keep your businesses and customers safe. 

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