Combating Identity Theft Through Document Verification

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document verification

The fact that identity fraud is becoming increasingly popular is no secret. In fact, according to FTC’s Consumer Sentinel Network report of 2020, approximately 2.2  million fraud complaints were made by consumers in the U.S, with the most common type of fraud being imposter scams.  With the help of artificial intelligence, an automated document validation process brings about more accurate results than manual ways of document verification

Prevalent Identity Frauds 

As technology evolves rapidly, so does the availability of opportunities for fraudsters. Protecting sensitive information from these fraudsters can help you avoid becoming a victim. Here’s a list of the various types of identity frauds that you may want to look out for:

  1. Debit/Credit Card Fraud
  2. Drivers License Identity Theft
  3. Account Takeover
  4. Tax Return Identity Theft
  5. Medical ID Theft

Avoiding Crisis Through Online Document Verification

Suppose you arrive at a bank to open your account or perform some other transaction. To provide proof of your identity, you submit a government-issued ID card to a verification officer, who verifies document details by matching your face against the picture on the ID document to make sure you are who you claim to be. In today’s world, this role is being played by softwares that automate the process of document verification for tackling any form of fraud that could take place due to fake documents. 

The three most common types of document frauds used by imposters to fake their identity are listed below:

  • Illegitimate Documents

For example, documents missing rainbow prints and Holograms

  • False Documents

Documents that belong to someone else and are stolen by fraudsters to try and authenticate themselves 

  • Modified Documents

Manipulated fonts or writing styles in a document

Steps Involved In An Efficient Document Check 

Each customer provides documents to validate their identity and address. During the onboarding process, an AI-based Document Verification Software asks the customer to take or upload a picture of their ID documents in real-time. Using OCR technology, the software is able to verify documents through accurate extraction, is able to analyze them within seconds, and sends the results to the back office. The customer is able to gain access to the platform only If the provided details are accurate. 

  • Information Extracted Includes:
    • Personal Credentials (Full Name, DoB, Blood Group, etc.)
    • ID Information (Birth Certificate Number, Tax Number, Domicile, etc.)
    • Nationality and Immigration Status (Place of Birth, Citizenship, etc.) 
    • Employment and Business Registration

Identification VS Authentication of Documents

For a better understanding of the concept of document verification, the difference between document identification and document authentication needs to be pointed out. Identification is the ability to accurately identifying the customer. On the other hand, Authentication is the ability to prove that the customer is genuinely who they are claiming to be and are not imposters in possession of illegitimate, false, or modified documents. 

The process of verification is usually carried out once, but after being verified, the customer’s identity must be authenticated every time they access a platform. For example, if you personally know a customer, you can simply “authenticate” them by meeting in person. However, since most of the transactions take place online, organizations are making use of identity verification and authentication softwares to re-establish the customer’s identity. Customers can be revalidated through liveness detection, geolocation logs, checking the age and nationality through the documents provided by the customer, and lastly, through consent collection. 

Benefits of Document Verification

  1. Ease Of Use

Through document verification, customer identity can be verified by simply providing an image of their ID document such as a passport or driver’s license. This process can either be carried out in person or done remotely online using a webcam to take a photo for identification purposes.

  1. Faster Turnaround Time

Instead of waiting for customers to mail the required documents or going in person to have their documents verified, online document verification softwares can immediately validate a document after it is submitted electronically. 

  1. Higher Accuracy 

For many businesses, the massive volume of data that is collected, which includes all the necessary customer details such as their  mailing addresses or phone numbers, simply is not suitable for manual verification anymore, especially as automated verification of documents has a higher accuracy rate than manual processes. 

  1. Compliance With KYC/AML Regulations

To avoid compromising any regulations set up by institutions like FATF, FinMA, or FINTRAC, businesses are required to conduct CDD (Customer Due Diligence) of their customers by analyzing, recording, and authenticating documents submitted to eliminate any chances of fraud such as that of identity theft. 

  1. Risk Reduction

By validating documents, the customer’s identity is also verified which helps filter out scammers and imposters. In return, it helps lower the chances of frauds such as identity theft and account takeovers.