Here’s How to Detect Fraudulent Documents

Fraudsters use fake or forged documents for several criminal activities. Understanding how to detect fraudulent documents can be useful in combating document fraud and preventing associated losses

In recent times, document fraud has seen unprecedented rise – growing 24% in 2022 – causing losses worth billions of dollars annually and non-compliance with Know Your Customer (KYC) and Anti Money Laundering (AML) regulations.

Forging or creating fake documents to facilitate illegal activities and fool security systems is known as document fraud. Before learning how to detect fraudulent documents, businesses must understand that bad actors manipulate documents using personal data of consumers, accessed through phishing, hacking, data breaches, or even buying from the dark web. Modern technology, especially Generative AI and deepfakes, is enabling bad actors to manipulate images and videos that closely resemble the original.

Some examples of fraudulent documents that bad actors use, are:

• Counterfeit Documents: Reproducing genuine documents in an unauthorized manner.
• Forged Documents: Altering genuine documents, such as modifying names, dates, or photos while passing them as original.
• Pseudo Documents: Replicating codes from official documents, like passports or IDs, but without legal recognition.
• Fraudulently Obtained Genuine (FOG) Documents: Obtaining genuine documents through theft, corruption, phishing, or impersonation.
• Image Fraud: Manipulating ID photos to impersonate the document owner.
• Synthetic Identities: Creating fictitious identities using a combination of real and fake information.
• Template Fraud: Using easily available online templates to create fraudulent documents.
• Generated Document Fraud: Using AI tools to generate entirely new documents based on a few prompts.
• Serial Fraud: Using automation to exploit vulnerabilities in document controls on a large scale.
• ‍Fighting ID card fraud: To combat document fraud, several countries have defined laws and regulations, including:

United States

Federal laws like the Identity Theft and Assumption Deterrence Act, in the US, criminalize the unauthorized use or creation of identification documents. The Department of Homeland Security (DHS) enforces security standards for IDs like driver’s licenses under the REAL ID Act.

European Union

The member nations of the European Union, address document fraud using both national laws and EU-wide regulations. These include the Schengen Borders Code, which mandates biometric standards for passports and IDs, and the European Anti-Fraud Office (OLAF) to combat forgery across borders.

Latin America

Although regulations vary by country, several nations have recently strengthened laws to fight the rise in ID card fraud. For instance, Brazil criminalizes forgery of public documents through the Penal Code, whereas countries like Argentina and Mexico implement biometric identification systems to enhance document security and control forgery attempts.

How to detect fraudulent documents

Businesses wondering how to detect fraudulent documents should look for telltales indicative of ID card fraud, such as missing numbers on bank statements or checks, incorrect spellings, grammatical errors, misplaced elements in a document, variations in logos, and so forth.

For comprehensive document fraud detection, businesses must choose identity check APIs and technology-driven solutions. This is because manual verification techniques are time- and labor-intensive, prone to human errors and biases, and difficult to scale up. Using automated, artificial intelligence driven document verification software, businesses can spot suspicious documents in real time, improve accuracy and speed in decision-making, and reduce overall fraud detection costs.

Here’s how to detect fraudulent documents using technology driven solutions:

• Photoshop Detection: Analyze metadata, lighting, textures, and similar other features to detect manipulation using Adobe Photoshop software.
• EXIF Analysis: Examine the metadata in digital images or PDFs to analyze basic information such as device information, creation or modification timestamp, and GPS details.
• Grayscale Analysis: Analyze the distribution of pixel values across the image to ascertain the intensity levels of pixels in grayscale images.
• Cross-Validation Techniques: Compare multiple document fields or sources of information to verify a document’s validity.
• MRZ (Machine Readable Zone) Verification: Check the digits and checksums embedded within the MRZ to detect errors in passports, visas, and other ID cards.
• Fingerprint Matching: Compare the unique patterns of a person’s fingerprint with stored data.
• Facial Recognition: Use algorithms to match facial features against a database of digital photos. 

Why trust Caf

With an in-depth knowledge of the materials, security features, and techniques used in legitimate documents, Caf not only helps businesses detect fraudulent documents swiftly and accurately, but also maintain customer security and trust. Caf can scrutinize thousands of disparate documents across geographical regions; and has access to numerous trusted public, private and proprietary databases, to identify even the most subtle signs of forgery.

Leveraging technologies such as Optical Character Recognition (OCR), facial recognition, biometrics, liveness detection, machine learning, artificial intelligence in combination with human expertise, Caf’s document verification solutions ensure no manipulation attempt goes unnoticed. By ensuring continuous updates to its suite of solutions, Caf enables businesses to keep pace with evolving forgery tactics, including deepfakes, generative AI, and synthetic identity fraud, thwart complex technology-driven fraud, and remain compliant with legal and regulatory requirements.

To streamline the document verification process, enhance customer experience, and improve conversion rates, book a demo now.

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