60% of Fraudsters Use Physical Fakes: New Study From Sumsub

  • Fraud Detection , AML and KYC
  • 15.12.2021 11:15 am

Anti-fraud and verification platform, Sumsub, is sharing the results of its identity fraud research to help businesses protect themselves from cybercriminals

Sumsub, a tech company fighting money laundering and online fraud, today announces the results of its identity fraud study while making predictions for the upcoming year. The research took place between 2020 and 2021 and focused on identity fraud in various industries, including banking, crypto, trading, and gambling. Over 6,000 document types from 220+ countries and territories were analyzed.

The study reveals that over 65 percent of identity fraud occurs during ID checks. Other fraud-prone verification stages include biometric checks (7 percent of fraud), proof of address checks (5 percent), and selfie checks (1 percent). Over 60 percent of fraudsters use physical fakes to trick the verification system, while digital forgeries are used by less than 15 percent. In a third of cases, fraudsters forge physical documents from scratch;  whereas in 22 percent of cases, they tamper with a valid document.

Fraud rates aren’t going to decline. This is an eternal game of cat-and-mouse: criminals come up with new fraud techniques, and we learn to catch them. The biggest danger is deepfakes. At present, it’s difficult for an ordinary person to make a high-quality deepfake—but soon, I'm afraid, technologies will reach the point where everyone can make a realistic deepfake on their phone in 2 seconds. We must not lose our vigilance and work ahead of fraudsters,” — says Vyacheslav Zholudev, Sumsub’s co-founder and Chief Technical Officer.

The report also highlights the prevalence of fraud in the banking, crypto, trading, and gambling sectors. In the banking sector, more fraud was committed during the winter holidays. The crypto fraud rate spiked in November 2020 and then gradually decreased, while the trading sector saw a double peak in late 2020/early 2021. In the gambling sector, the fraud rate remained stable overall. 

It also turns out that fraudsters are becoming more skilled. Sumsub’s data suggests that 35 percent of all fraud attempts are initiated by fraudsters using advanced forgery techniques, and the company expects this figure to rise in the future.

Sumsub concludes with several recommendations to help companies avoid identity fraud. Accordingly, the most effective way for businesses to stay safe is to screen for complex fraud schemes at different onboarding stages. It's also essential to consider specific red flags, including suspicious email domains and IP addresses.

To get full access to the Sumsub Identity Fraud Study 2021, please follow this link.

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