Onfido, the global identity verification and authentication provider, today published its 2022 Identity Fraud Report, which reveals a new wave of organized fraud activity entering the marketplace.

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“Biometric verification provides more protection against fraud than document verification alone — and a video selfie check provides superior protection over a photo selfie check”

Over the past 12 months, 47% of all identity document (ID) fraud was classed as ‘medium’ sophisticated fraud, which is a 57% increase over the previous year. Less apparent errors, such as visibly incorrect fonts, imitated security features, or the wrong photo printing technique, suggest an increase in fraud rings. These organized groups will attempt to create ‘verified’ accounts with fake documents before using them to embark on other types of fraud. The return for this type of attack is greater than others, such as sign-up bonuses.

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Identity theft losses increased 42% in 2020, reaching $712 billion, making digital identity verification critical for enterprises. Whether for financial services, retail, or healthcare, verifying that an online user is legitimate and present defines customer trust and determines if a company is a leader or laggard in the digital economy.

As consumers become more comfortable with digital transactions, fraudsters have remained online with them, as the report found that identity fraud is yet to return to pre-pandemic levels. In 2020, there was a 41% increase in ID fraud, with the average ID fraud rate reaching 5.8%. Over the past 12 months, even though physical restrictions began to lift, the average fraud rate was recorded at 5.9%, showing that fraud still hasn’t dropped back to pre-pandemic levels. The jump in fraud that was a direct result of the pandemic appears to be here to stay.

“Large-scale operations often undertaken by criminal fraud rings have the resources to conduct sophisticated fraud such as deepfakes, 2D and 3D masks. They might also resort to techniques like coercion. Businesses will see fewer of these types of attacks, but they can cause the most damage in the shortest space of time,” said Michael Van Gestel, Head of Global Document Fraud at Onfido. “By incorporating biometric authentication and other sophisticated identity verification methods, businesses can ensure that no matter how fraudsters try to capitalize on the changing situation, they can significantly lower the risk of fraud to their organization and customers.”

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