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In the era of digital transformation, various application processes have become faster and more convenient. This digital shift benefits not only applicants and underwriters but also individuals with malicious intentions, who seek to deceive banks and customers using counterfeit documents. Document fraud and misconduct have emerged as a substantial challenge, costing the global economy billions each year.

From securing loans beyond eligibility to illegal residence in a country, counterfeit documents serve multiple fraudulent purposes. In this evolving landscape of digital applications, identifying fake documents has become a pressing need. As digital backlogs continue to grow, verifying the authenticity of documents has become increasingly complex. Shockingly, document forgeries rose by 24% last year, compared to 18% in 2021, underscoring the urgency of effective document verification.

What Constitutes Document Forgery?

Document forgery, in simple terms, refers to the creation, alteration, or imitation of official documents with the intent of giving fictitious information a misleading sense of legitimacy. These fabricated documents aim to deceive and defraud unsuspecting individuals, making document verification an imperative practice. Passport forgeries topped the list, followed by ID cards, comprising more than 40% and 26%, respectively.

On the dark web, counterfeit Maltese passports are priced at $4000, while a fake New York driver’s license can be purchased for a mere $60. These alarming statistics underscore the critical importance of robust document verification processes.

Categories of Document Forgery

Document forgery manifests in three primary categories: freehand simulation, tracing, and digital manipulation. Here’s a brief overview of each:

1. Freehand Simulation: Involves the attempt to imitate a person’s signature, handwriting, or design by replicating genuine documents.

2. Tracing: Encompasses the use of luminescence or carbon tracing to reproduce written text, signatures, and designs. The criminal places an empty page over the original document and traces words and design elements.

3. Digital Manipulation: Utilizes image editing software to duplicate signatures, information, and incorporate them into a forged document.

Distinguishing Fake from Forged Documents

Distinguishing between fake and forged documents is vital. A fake document is one that was not issued or recognized by the government. Fake documents can assume various forms depending on the context, often created to deceive during loan or job applications. Detecting fake documents is relatively straightforward, particularly when seals, figures, or other official indicators are missing.

Forged documents, on the other hand, are genuine documents that have been tampered with. Fraudsters may alter names, birthdays, or photographs on identification cards, making it more challenging to detect these alterations. If a document indicates a person’s existence, fraudsters can manipulate it to create forged identity documents.

Unmasking Fake Documents: How It’s Done

Verifying the authenticity of a document starts with understanding its purpose. Whether it’s proof of address, identity verification, or financial capability, each document must undergo rigorous scrutiny before acceptance. Forged bank statements, IDs, and paychecks are frequently used in identity fraud or financial deception and often exhibit glaring flaws, making them distinguishable from genuine documents. Some common indicators of fake documents include:

1. Missing Numbers: Skilled fraudsters may alter values on bank statements without proper verification. Checking the accuracy of these numbers is a crucial step in document verification.

2. Data Entry Errors: Misspellings, incorrect punctuation, grammatical errors, or inconsistent information are telltale signs of fake documents.

3. Altered Elements: Changes in font sizes or layouts on a document can indicate a forgery, especially if fonts not typically found on legitimate IDs are used.

4. Logo Discrepancies: Variations between an issuing institution’s logo and the document in question are clear red flags.

How Document Forgery Occurs

Countries with robust welfare systems, such as the United States, Canada, Australia, and Germany, are often associated with forged IDs and passports. These locations are prime targets for illegal immigration. The cost of obtaining legal identification documents is directly linked to their security features and design complexity. Consequently, the more expensive the document, the more professionals, including designers and specific paper suppliers, are involved in its creation.

The choice of reference documents for forgery is also influenced by their cost. For instance, a Maltese passport costs $4000, while a Bulgarian passport can be forged for just $20, highlighting the disparities in security features. However, both documents are among the most commonly forged forms of identification.

Industries at Risk from Fake Documents

Certain industries mistakenly believe that fraudulent identity documents aren’t a concern for them since they are not subject to KYC compliance standards. These industries include healthcare and education, which are less aware and, consequently, less protected against identity theft and document fraud. Scammers often target these industries due to their perceived vulnerability.

The Importance of Detecting Fake Documents

Detecting counterfeit documents is of paramount importance for several reasons, including:

1. Financial Loss Prevention: Fake documents can lead to significant financial losses, enabling criminals to engage in identity theft, fraudulent transactions, and insurance fraud. Detecting counterfeit financial documents like fake checks, agreements, and invoices is crucial for protecting a company’s finances.

2. Data Security and Protection: Criminals can exploit counterfeit ID documents, access secure locations, systems, or sensitive data. Detecting fake documents is essential to maintaining a secure environment and safeguarding sensitive information.

3. Maintaining Customer Trust: Falling victim to a document forgery scam can damage a company’s reputation and erode customer trust. Customers prefer businesses that prioritize security, and by detecting fake documents, companies can demonstrate their commitment to this principle.

4. Avoiding Legal Consequences: Accepting forged documents can result in legal complications, including breaches of contract and identity theft-related legal issues. Companies can mitigate these risks by implementing robust detection and prevention measures for fake documents.

Is Your Sector a Prime Target for Identity Fraud with Fake Documents?

Some sectors are more susceptible to identity fraud involving fake documents. Primary hotspots include country borders, land checkpoints, and airport customs, where individuals aim to gain access to various financial assets, particularly in banking, fintech, and insurance. While identity verification is a requirement, it does not always match the level of scrutiny applied at border crossings. Border control agents receive extensive training in identifying fraudulent indicators in identity documents. This level of expertise takes weeks to acquire, and when screening travelers, they encounter a wide range of document types daily.

Conversely, professionals at banks or telecommunications centers are typically familiar with national identity documents and may struggle with foreign documents. This is particularly evident when an Australian passport is presented at a local bank in Geneva.

Several industries, including healthcare and education, may mistakenly believe that the fraudulent identity problem doesn’t apply to them because they are not subject to KYC compliance standards. Consequently, they are less vigilant and less aware of the risks, making them attractive targets for scammers.

Protecting Against Fake Documents

With technological advancements, detecting fake documents has become more challenging than ever before. Fraudsters now employ digital software to make sophisticated changes and create entirely new documents that can be nearly impossible to detect manually. The modern landscape of document verification requires advanced fraud detection technology to identify all alterations to an electronic document.

Why Choose FACEKI?

FACEKI employs state-of-the-art AI-powered document verification services, capable of examining and detecting counterfeit or false documents within seconds. Our advanced OCR technology extracts and scans data for authenticity, eliminating the need for manual verification. By choosing FACEKI, you can protect your organization from the perils of fake documents, saving significant money in fines, sanctions, and penalties.

Contact FACEKI to book a demo today.