Verification knowledge hub
Learn about identity theft and how to protect your business and users from it.
According to Sumsub’s recent Identity Fraud Report, 1.7% of all verifications analyzed by Sumsub in 2022 were fraudulent, and this worrying figure is expected to increase in the future. ID cards appear to be the most commonly used documents for scams and falsification, while the most affected industries are e-sports, crypto, banking and consulting. The methods used by fraudsters include image tampering and even deepfakes.
Indeed, businesses are often vulnerable to cyber attacks, and fraudsters will seize any opportunity to gather sensitive data to use for identity fraud. However, with the right anti-fraud controls in place, companies can avoid having to deal with false bank accounts, fake licenses, screaming headlines and police investigations.
In this article, we’re going to cover the most common identity theft types and how businesses and customers can protect themselves.
Identity theft is when personal information—such as name, date of birth, address, bank account, emails—is stolen to make purchases, open accounts, withdraw money and get tax refunds. This allows fraudsters to use their victim’s identity for illicit purposes.
Be it through cyber attacks or data leaks, identity thieves often target small and medium-sized businesses to scavenge personal data, which leads to significant reputational damage and losses. According to Statista, business email compromises alone amounted to around $2.7 billion in reported victim losses in 2022.
Fraudsters can target individuals directly by stealing mail or scavenging personal information on Facebook, Twitter or Instagram. They can also hack emails, bank accounts, or buy data from the “dark web”.
Here are the most common identity theft methods:
Fortunately, fraudsters also make mistakes, and there are ways to stop them before they try to hurt customers and businesses.
Being aware of blind spots and incorporating certain practices can considerably reduce the risks of fraud. Below we share some advice on secure methods of identity theft prevention for businesses and their customers.
Develop and incorporate guidelines on how your business handles and stores customer information—including how the business accepts payments and performs client identification.
Fraud incidents lead to many consequences, including law enforcement investigations and chargebacks, meaning financial and reputational losses for the business.
Security is key to the success of any financial business—especially those that deal in the personal data of thousands or millions of people. Businesses should focus on their internal practices and study their security needs step by step as there is no defense that suits all.
E-commerce, finance (online banking) and social media.
If you are a business owner:
The best way to protect your identity is to follow a set of everyday rules, including:
It would be useful for clients to monitor credit and tax reports and banking statements, check medical information and beware of unusual account alerts. For business owners, a reliable KYC solution and biometric verification are must-haves.