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Different types of recruitment fraud and how to manage them effectively.

An increase in candidate fraud is presenting a real risk for the HR industry, especially for remote recruiters. We delve into the history of document fraud, and explain how businesses can protect themselves from the different types of recruitment fraud.

In 1934, Albert Einstein wrote: “Concern for man and his fate must always form the chief interest of all technical endeavors.” Although he was likely referring to his discoveries of the atom, and what, just a few years later, was to become the atomic bomb, Einstein’s quote also sums up the responsibility of those who create and rely on the latest technological advances. Thanks to the rapid pace at which the world has gone digital, technological innovation has produced risks that must be navigated in every industry, even in the recruitment sector.

Document fraud has always existed, from the earliest days of identity documents. For example, in 16th century France during the reign of François I the emergence of the first attempts to curb this already widespread scourge started occurring when people falsified their identity papers to avoid paying taxes. According to Christophe Naudin in his publication Document fraud: the explosion of a cross-disciplinary crime at the crossroads of all forms of trafficking he states, “To avoid paying tithes and gabelles (taxes for the church and for common goods), Jean du Moulin, who generally signed his name with a simple anonymous cross, claimed to be called Jean Meunier or Jean Blanc or Leblanc, or even Moulinier, swearing before God and all his saints that he had fulfilled his duties.” 

Document fraud is one of those reprehensible acts that persist and mutate constantly, despite the inventiveness and ongoing technological advances developed to curb it. Thanks to the democratization of digital tools, the explosion in mobility and widespread access to the Internet, this type of crime is becoming increasingly popular among unscrupulous individuals who are prepared to falsify documents and information to achieve their ends. And the HR industry is no exception…

Understanding the different types of hiring fraud. 

To grasp the impact of document fraud on recruiters and companies likely to hire a fraudster, it is necessary to understand the risks, and therefore the types of fraud.

Application fraud.

Application fraud refers to any information provided by the candidate that is invented or altered by him or her. Examples include, falsifying the ability to speak a foreign language, lying about experience abroad or exaggerating involvement in a project. 

Difficult to identify when reading a CV or application file, application fraud is nevertheless easily detectable when the candidate is confronted with his or her lie during an interview or the first few days on the job. For example, a simple foreign-language proficiency test during the interview will suffice to reveal the fraud.  

Often of low intensity, application fraud is extremely widespread: in 2022, 62% of recruiters in France admitted to having already observed falsified CVs during recruitment. However, application fraud often only materializes through slight alterations, with the “enormities” rarely going unnoticed. The final risk for the recruiter is therefore relatively low.

Document fraud. 

Document fraud involves the creation or use of falsified documents by the candidate. This may include forging identity documents, falsifying diplomas or forging credentials. It differs from application fraud in that the fraudulent candidate will attempt to “justify” the invented information by producing documents attesting to the accuracy of the lie in question. In some cases, it may also involve identity theft. According to the Association of Certified Fraud Examiners, a fraud scheme can last 12 months before detection and costs companies a loss of $8,300 a month.

This method of fraud is becoming increasingly widespread, facilitated by the use of technological tools (not to mention the use of Artificial Intelligence). Today, easy access to DarkWeb platforms, for example, enables anyone to obtain false papers for just a few hundred euros. Such is the democratization that it is now possible to find resellers of false identity papers on mainstream applications, such as SnapChat.  

Document fraud, unlike application fraud, is a major challenge for a growing number of institutional and private players. Mainly centered around the falsification and creation of false identity documents (CNI, passport, etc.) or proof of identity (invoices, transport tickets, etc.), it presents a significant multi-factorial risk for end employers:

Legal: the irregularity of certain documents, particularly identity documents, can lead to severe legal consequences for the final employer: closure of the company, criminal liability of the director or even substantial fines. In France, regulations place the responsibility for verifying identity and professional documents on the employer, particularly in the event of an incident involving the fraudulent employee.

Reputational: The reputational stakes for companies that fall victim to fraud can be substantial. Organizations that are perceived as exploiting vulnerable, irregular or law-breaking workers risk damage to their brand image, which is sometimes more damaging than a simple fine.

Regulatory: In some sectors, companies require licenses or authorizations to operate. The employment of illegal workers can lead to the revocation of these licenses or authorizations, and seriously hinder company operations. 

Due to document fraud having been identified as a critical issue by a growing number of players, there has been an increase in the number of training courses and job openings aimed at combating it, both within institutions and private companies.  

Because it is the main threat facing recruiters today, document fraud and its implications for recruitment processes will be the main focus.

Document fraud and legal obligations. 

When it comes to recruitment in the EU, each country is regulated by law, and can be subject to regular checks by various government bodies. For example, the recruitment of an illegal worker can have a severe impact on a company, even if the latter demonstrates in good faith that it was unaware of the fraud. Plus, it is the company’s right to ask a potential employee their abilities such as foreign language skills as long as they correlate to the job posting.

This legislative and jurisprudential framework is constantly evolving and requires dedicated regulatory monitoring. Even in the UK, Crowe, a UK-based accountancy firm along with the University of Portsmouth, carried out Resume and CV checks of an unnamed organization’s 5,000 employees and found 80% contained discrepancies, with 20% using inflated job titles and 12% falsifying educational grades. 

To deal with these threats while complying with European regulations (notably the GDPR), technological solutions have emerged to facilitate the work of recruiters. Optical character recognition (OCR) technology is at the heart of these solutions. But the democratization of technologies enabling the falsification or creation of documents that can be used as proof of identity (passports, proof of residence, licenses, etc.) now requires the implementation of more robust, granular and detailed processes and solutions, in order to get to know candidates properly.

To this end, IDnow has developed various technical solutions to respond to these new threats: 

  • Real-time document capture: using a web or mobile SDK that can be easily integrated into an existing interface, this increases the level of security while saving considerable time thanks to its many advantages (real-time photo or video capture, fluid, multi-channel UX, NFC chip reading, etc.). 
  • Facial recognition and live detection: biometric face capture enables us to use a video verification to ensure that the user is who they claim to be on their documents.  
  • Instant document verification: as a stand-alone API or integrated into an architecture, it enables virtually instantaneous verification (averaging 12 seconds) of the authenticity and validity of documents submitted. 

These solutions enable recruiters to detect document fraud, and are capable of detecting the most elaborate forgeries.

Identifying the right solution: what are the key criteria?  

Numerous solutions, such as those from IDnow, have appeared over the last 10 years to enable recruiters to work while protecting their companies from fraud. But are all solutions the same?  

Finding the right solution involves more than a simple economic calculation. It must offer a number of advantages, which can be prioritized as follows:

  1. Reliability: The reliability of the tests carried out by the identity verification solution is the main criterion recruiters should aim for. The solution must provide its user with guarantees as to the results provided. 
  2. Transversality: The solution should incorporate the latest technologies for advanced fraud detection, with the option of live detection, face-matching or state-of-the-art occlusion techniques. It should also include the option of additional expert checks. 
  3. Flexibility: The solution should offer a wide range of options in terms of the type and range of documents covered, enabling checks to be customized according to the candidate’s profile, the documents provided, the employer’s expectations and the relevant regulatory framework. 
  4. Speed: It’s important that the solution delivers fast, near-instantaneous results, so as not to overburden the recruitment process and congest the recruitment department. 
  5. Rationality: The solution should meet the economic constraints of the recruiter and its organization, and be adapted to its needs: volume of candidates, frequency of recruitment, type of checks required, etc.

To meet these challenges, IDnow has developed a range of solutions and tools tailored to the risks identified. Using the established typology, here’s how IDnow addresses the issues identified:

  1. Reliability: With 99.9% document fraud detection reliability, IDnow’s remote identity verification solution brings peace of mind to its users. In case of doubt, fraud experts can intervene to verify or complete the analysis made by the automatic solution. 
  2. Transversality: Based on the latest technologies in terms of occlusion, live detection and face matching, IDnow’s solutions are constantly updated by teams of dedicated document fraud experts to identify the latest fraud trends. 
  3. Flexibility: The IDnow solution can be customized, enabling recruiters to adjust their checks intuitively and efficiently. 
  4. Speed: with an average processing time of 12 seconds, the speed of verification brings unrivaled fluidity to recruitment, particularly in the case of high volumes. 
  5. Rationality: Available in several formats and options, the IDnow sales team is committed to offering its customers and partners solutions tailored to their needs and budgets. Choose our turnkey solution, or integrate it into your own applications using our APIs and development kits.

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Different types of recruitment fraud and how to manage them effectively. 1

Mallaury Marie
Content Manager at IDnow
Connect with Mallaury on LinkedIn

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