Employment Identity Fraud: Do You Know Who You’re Hiring?
Employment identity fraud is becoming a serious threat to businesses, where individuals use fake documents or stolen identities. Fraudsters are getting more experienced in their tactics, using fake, stolen, or fabricated identities to secure jobs they are either unqualified for or legally prohibited from holding. In 2023 alone, Keesing Technologies found that the employment sector accounted for 45% of all false document submissions, making it the most targeted industry. These statistics highlight the increasing urgency for companies to implement stronger protections against identity fraud in their hiring processes. However, advancements in technology have provided powerful tools to combat this threat. In this blog, we will explore what employment identity fraud is, why it happens, and how organizations can prevent it through robust identity verification solutions.
Understanding Employment Identity Fraud
Identity fraud occurs when an individual uses false, stolen, or fabricated identification details for personal gain. In the context of employment, identity fraud usually involves someone assuming another person’s identity or inventing a fake one to obtain a job or bypass legal employment restrictions. Identity fraud takes several forms:
- Synthetic Identity Fraud is when someone blends actual and fraudulent information to establish a new identity. A fraudster, for example, may utilize a legal Social Security number while providing fake names.
- Identity Theft occurs when a person uses another person’s true identity, which is commonly gained through data breaches, phishing attempts, or stolen documents.
- Fabricated Identity: This is the process of generating a completely new, false identity from scratch, utilizing counterfeit documents.
Each of these strategies can be used to get unauthorized access to a job, making it difficult for companies to distinguish between legitimate and fraudulent candidates without suitable verification methods. The consequences of identity fraud can be devastating, leading to financial losses, damaged credit scores, and reputational harm.
Why Does One Commit Employment Identity Fraud
There are several reasons why someone might commit employment identity fraud.
Some of the most common are:
- Avoiding Disqualification: People with a criminal past, insufficient work history, or no work authorization may provide false information to evade pre-employment screening processes and acquire positions they would otherwise be denied.
- Avoiding Legal Work Restrictions: In some situations, people who do not have the proper permissions or work visas may use forged documents to seem eligible for employment, breaking immigration and labor regulations.
- Access to Company Resources: Some people engage in employment fraud to acquire access to sensitive company systems. Once employed, they may participate in illegal activities such as corporate espionage, data theft, or other criminal acts. They may also use their positions to file false tax returns, collect benefits, or steal company assets for personal gain.
Why Do You Need to Verify Candidates
Verifying potential employees’ identities has become a crucial step in the employment process. Background checks are typically insufficient since they rely greatly on the candidate’s information, which can be easily fabricated. Without validating a person’s identification, businesses risk hiring someone under false pretenses, which might result in the following consequences:
- Legal and Regulatory Issues: Hiring individuals ineligible for employment due to fraudulent documents may result in penalties or punishments for noncompliance with tax, labor, and immigration laws.
- Financial Losses: The expense of replacing a bad hire is high. According to the US Department of Labor, a bad hire can cost up to 30% of the employee’s first-year salary. There are numerous costs associated with this: advertising the new position, background checks, assessments, and all work hours invested. Beyond replacement costs, companies may suffer direct financial losses if the dishonest employee engages in internal theft, fraud, or other criminal activity.
- Operational Disruptions: If a fraudulent hire gets access to sensitive information, the implications might be severe. Data breaches, insider threats, and disruptions to business continuity are all potential dangers, particularly if the individual is behaving maliciously.
Who Would Benefit from Identity Verification Solutions?
Employment-related identity fraud affects various businesses, so identity verification is crucial across several sectors:
- Staffing Agencies: With high volumes of quick placements, agencies run the risk of hiring unqualified or fraudulent workers, which harms both clients and reputation.
- Ride-sharing or Gig Platforms: Remote hiring exposes these industries to fraudulent workers, jeopardizing customer safety and brand trust.
- Companies Providing Employee Background Checks: They play an important role in ensuring the authenticity of candidates’ identities and qualifications. These businesses frequently need to validate ID documents as part of their services.
- Regular Companies: Any company can hire fraudulent employees. Verifying identities helps to mitigate risks such as data theft and insider fraud.
Verifying Identities of Future Employees
Employment identity fraud is a growing threat that can have devastating consequences for businesses. To protect against it, companies must implement stringent identity verification processes during the hiring phase. With solutions like AuthentiScan, businesses can verify applicant identities, ensuring they hire legitimate candidates and safeguard their operations from potential fraud.
Keesing AuthentiScan makes it quick and easy to verify ID documents and confirm a person’s genuine identity. You can check 6,000+ types of ID documents from 200+ issuing countries and institutions. Our technologies have been developed to be as accurate and user-friendly as possible to boost efficiency and security, allowing businesses to confidently authenticate identities.
In exceptional cases like discrepancies in the provided documents, the Keesing Helpdesk give conclusive checks & support. Our Expert Helpdesk team is staffed with certified experts, with experience in royal military police, immigration, border control and commercial setting. They assist customers by answering document-specific questions, inspecting questionable IDs, and helping companies decide whether to accept or decline presented documents.
If you are a company that already has an identity verification system, with Keesing Data as a Service, you have accurate and up-to-date ID document data at your disposal. You will have access to data sets for reference and machine learning tailored to your needs, and you stay connected to a continuously updated and trustworthy document verification resource. The ID document data can be used for ID verification services to determine the authenticity of passports, ID cards, visas, driving licenses, residence permits, military, consular, working permits, green cards, and more from around the globe.
All Keesing solutions are built on DocumentChecker, a comprehensive and up-to-date database for ID documents and banknotes.
By integrating Keesing’s solutions into the onboarding process, companies can significantly reduce the risk of identity fraud, improve compliance, and protect sensitive data from being accessed by fraudulent individuals.
Experience how our products first-hand for free, contact us below for product demo or trial. For any other enquiries, email us or call us at +31207157825
