Document fraud has become a mainstream offense in the UK, with both the Insurance Fraud Bureau and the City of London Police having spoken out over the past year. Cifas, a leader in fraud prevention, was able to pinpoint that 64% of all UK fraud-related offenses are, in fact, identity fraud cases. The UK Insurance Fraud Bureau warned the nation this year that insurance fraud has nearly doubled in the UK over the past 12 months solely due to stolen identities. Many organizations are unable to detect fraudulent documents due to the use of error-prone manual document verification methods. With the right AI-powered tools, organizations can verify documents seamlessly, ensuring accurate document fraud detection.
Presentation attacks are now targeting most industries across the country, often subverting authentication systems. Fraudulent documents containing either stolen or false information are used to commit credit card fraud, employment fraud, insurance fraud, healthcare fraud, and more.
Identity Fraud Spikes
Identity fraud accounts for a large proportion of the UK’s overall fraud-related crimes. 64% of all fraud-related cases in the nation are now identity fraud, and most victims of these attacks were found to be over the age of 61.
How Fraudulent Documents Affect Different Sectors
Document fraud affects almost every sector, each facing unique challenges due to the nature of their operations and how document fraud can be carried out. Here’s a closer look at how different industries are affected:
Financial Institutions
Financial institutions are often targeted by document fraud, with fake documents passing as legitimate documents by human reviewers. Several kinds of illegal activities are therefore carried out, as fraudsters are able to replicate ID cards, including passports and driver’s licenses, or use stolen documents.
Credit Card Scams – Account Creation Fraud
Bad actors often use false identities or stolen identities to open new credit card accounts. They’ll often steal another person’s data, providing a name, address, or social security number. In many cases, the card will be approved due to the bank’s insufficient document fraud detection practices. The fraudster can then make purchases or withdraw large amounts of money, leaving the victim responsible for all of these expenses.
Loan Fraud
Fraudsters often use identities that have been stolen to apply for loans. To do this, bad actors also need to provide fake information, such as falsified employment and financial details, to receive a loan. Again, the victim is left with the burden of the repayment. Mortgage fraud is a specific kind of loan fraud that has become quite common, as fraudsters use these stolen identities to receive a home mortgage. This kind of scam can go unnoticed for a very long period of time due to the nature of mortgages being long-term payments that are often not immediately due.
Bank Account Takeover
In this form of identity fraud, the fraudster can hack into an existing bank account through the use of someone else’s credentials. Stolen identity documents, which can be bought on places such as the black market, are often used for these attacks.
Investment Fraud
False identities are used to open accounts within a brokerage platform. These accounts carry out illicit trading schemes, like attempting to manipulate stock prices or draining an account by purchasing stocks and selling them without the victim’s knowledge.
Insurance Fraud
Synthetic and stolen identities are used to commit insurance fraud, a type of scam that has risen in popularity quite alarmingly. This was noted by the UK’s Insurance Fraud Bureau, as well as the City of London Police, underlining the sudden increase in crimes.
Ursula Jallow, Director of the Insurance Fraud Bureau, recently underlined the Bureau’s shock at increased crimes regarding identity fraud. She states, “We’ve seen a worrying rise in insurance fraud made possible by identity theft. Stolen personal information can be used for every financial crime imaginable, and victims of impersonation who are often elderly or vulnerable face devastating consequences.”
We’ve seen a worrying rise in insurance fraud made possible by identity theft.
In June 2023, a piece by the City of London Police stated that “The City of London Police’s Insurance Fraud Enforcement Department (IFED) is urging the public to know the risks associated with committing insurance fraud, after reported cases of opportunistic fraud from March 2022 to April 2023 rose by 61 percent from the previous period.”
Reported cases of insurance fraud in the UK from March 2022 to April 2023 rose by 61 percent from the previous period.
The increase in insurance fraud, mainly driven by the use of falsified and stolen identities, underscores a broader trend of increasingly complex financial crimes. Ursula Jallow’s observations highlight a key point: identity theft has now become a major foundation for online fraud. For the victims of these crimes, the repercussions go beyond purely financial damage, such as legal battles, damaged credit, and emotional distress.
Healthcare Fraud
Medical Identity Theft: This form of fraud involves using someone’s identity to gain medical insurance, prescription coverage, or other benefits. Medical insurance can be expensive, so it’s a key target for fraudsters. In some cases, criminals can access prescription drugs or medical procedures, which also leaves the victim with an erroneous medical record.
Medical Insurance Fraud: Using falsified identities to submit fake claims regarding medical procedures or treatments is a common form of healthcare fraud. Fraudsters can receive compensation for procedures that they might not have actually had.
Prescription Drug Fraud: Stolen identities can be leveraged to get hold of substances such as opioids. This form of fraud can be dangerous, as criminals can sell medications to vulnerable people or abuse them themselves. Meanwhile, the patients who need them face difficulty accessing medicines.
Government and Social Services
Benefits Fraud: Benefit fraud consists of accessing welfare benefits that you’re not entitled to, such as a pension, unemployment benefits, or disability payments. Claiming government aid under a false identity depletes victims of needed government assistance and is a serious crime.
Tax Fraud: Fraudsters might use a stolen identity to claim illicit refunds from tax authorities. In addition to scamming tax authorities, the true holder of the stolen identity will then experience difficulties when filing legitimate returns.
Document Fraud Detection with ComplyCube
Implementing advanced document fraud detection processes is crucial for organizations to protect themselves from fraud. AI-powered technology can quickly spot stolen documents, fake documents, and synthetic identities. Manual verification has become outdated when it comes to detecting document fraud.
ComplyCube provides expert document authenticity checks, leveraging the best combination of AI and trained human experts. Their advanced document checks quickly verify whether provided documents have been compromised, forged, or copied from the internet and if they’ve been blacklisted or they’ve expired.
Their Optical Character Recognition (OCR) engine accurately extracts data from documents, reducing the risk of human error associated with using a manual review. Near Field Communication (NFC) is also offered, providing RFID analysis, biometric verification, visual checks, and PAD-Level 2 certified liveness detection, as well as the examination of security features.
Contact one of their compliance experts and implement smart document checks today.
