Identity Fraud: How to Protect Your Company From This Threat

Identity fraud is a crime committed through the use of a stolen identity (data). This type of violation occurs when an individual or institution impersonates another with the intent to gain an advantage or cause harm to someone.

With the implementation of new technologies in the market, the need to protect companies against new scams and fraud also arises. In this context, the issue of identity fraud has worried many businesses that do not know how to protect themselves from this type of crime.

Given this, it is essential to understand the ways in which identity fraud occurs in order to prevent it and protect your company. For this reason, we are here to explain what it is, its types, and how you can avoid it.

What is identity fraud?

Identity fraud is a crime committed through the use of a stolen identity (data). This type of violation occurs when an individual or institution impersonates another with the intent to gain an advantage or cause harm to someone. 

See also: Multi-Factor Authentication (MFA): A Complete Guide to Protecting Data

Very common, identity fraud primarily targets various types of companies. To commit the crime, criminals use mechanisms like software and apps that can spoof the victim’s image, and even use mannequins or dolls to mimic their appearance in front of cameras.

Types of Fraud

The crime can occur using various types of documents and information such as national IDs (like CPF), identity cards, credit cards, bank accounts, and driver’s licenses. Consequently, there are several types of identity fraud.

Data Theft

This occurs when scammers trick users into accessing pages, links, and sites (often via phishing) programmed to steal their personal data, such as credit card information.

As a result, they can make payments, purchases, and pay off debts in the victim’s name. A characteristic of this type of theft is that it occurs without the target noticing.

Synthetic Fraud

This type requires a long period for scammers to build a fictitious profile, using a mix of real and fake information. In this case, criminals create an entirely new identity. 

To do this, they combine data from real people (for example, using dormant national ID numbers, like a CPF) with fake data. This way, they can open bank accounts, create online store registrations, and make payments and purchases without being discovered. 

Read also: OCR: Understand What It Is and Its Importance in Fraud Prevention

Financing Using Falsified Documents

With falsified physical documents, a scammer can secure financing in another person’s name. In this context, the most common fraudulent contracts are for vehicle and real estate financing, and opening new companies.

It is very difficult for the victim to discover they have been targeted. Generally, banks contact them notifying them of the debts incurred by the criminal.

Fake Payment Slips

Sent by email or mail, criminals create a fraudulent payment slip (boleto) that looks identical to a real one. To do this, they build a faithful description and a payment barcode. 

This can be prevented through signature verification, for example.

The victim receives the document and makes the payment, which goes to the fraudsters who are impersonating the real institution. The lost money is rarely recovered.

Impacts of Fraud on a Business

The impacts that identity fraud can cause on your company are many. Among the main ones, we can highlight: significant financial loss and a feeling of insecurity within the organization. All this is compounded by the time dedicated to resolving the fraud and investigating the criminal. 

The loss of company property, in addition to money, is also a consequence of this rampant crime. This is because documents, certificates, titles, contracts, and correspondence can be illicitly shared and digitally hijacked by scammers. 

How to Protect Your Company From This Threat

Although these identity frauds can be resolved, the loss of assets and time is often immeasurable and irrecoverable.

For this reason, it is much more beneficial, practical, and profitable to invest in methods and technologies that promote fraud prevention, ensuring the security and transparency of your company. 

Some ways to protect your company against these frauds are:

• Thoroughly know your team, your internal and external collaborators (KYE);
• Verify the references and backgrounds of your partners, customers, and suppliers;
• Use technologies that aid in combating these frauds, such as continuous biometric validation, background checks, and criminal record checks.

Continuous Biometric Validation as a Form of Fraud Prevention

As an allied technology in the fight against identity fraud, we have continuous biometric validation.

It is an application that allows for the authentication of a service user, whether a customer or a partner/provider, by capturing an image of their face in real-time and with a method that prevents the use of static images (liveness detection).

Using this technology, we can request the user to perform a facial recognition process from time to time.

Continuous biometric validation also offers and guarantees your company increased security for the services offered and secure, convenient authentication with a low error rate.

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