Global identity orchestration platform, Sumsub, is sharing the results of its identity fraud study in Brazil to help local businesses stay protected from cybercrime.
London, September 6, 2022 — Sumsub, an international tech company fighting money laundering and online fraud, today published the results of its study on identity fraud and AML regulations in Brazil. The research took place between 2021 and 2022.
For this report, Sumsub combined anonymous statistics on 4.3 million verifications performed in Brazil with insights from legal and anti-fraud experts. This includes analysis of regulatory specifics, fraud types and detection methods. Sumsub’s analytics team also examined over 50,000 fraud attempts across 19 industries in Brazil.
Brazil is considered a major contributor to global online fraud. It’s one of the countries most infected by malware and among the biggest producers of spam, trojan viruses and phishing. Online identity fraud is on the rise there, and it’s reportedly having a serious impact on markets and businesses operating in the country. Sumsub’s research examines fraud patterns in Brazil’s identity verification market with insights into bestpractices and statistics. Key results of the study are highlighted below.
The data analyzed suggests that 80% of identity fraud attempts in Brazil occur at the ID verification stage. Proof of address (PoA) verification, a mandatory step under the Brazilian Central Bank (BACEN) and the Securities and Exchange Commission (CVM), makes up almost 15% of all fraud. Electricity and telephone bills and bank statements are primarily accepted as PoA, and fraudsters forge them by inserting false data (name, date of issue and address) into them. The remaining 5% of fraud relates to deepfakes, masks and pre-recorded videos used by fraudsters to deceive liveness and selfie checks.
According to Sumsub’s experts, the most popular type of identity fraud in Brazil is synthetic, meaning that it combines real and fake data to fabricate an identity to be used for signing up with various online services. Other common identity fraud types include data theft, counterfeit bills/bank slips, self-fraud, friendly fraud and financing with forged documents.
The study also found that passports are the most forged documents, being twice as likely to be forged as ID cards (1.2% of all passports have signs of forgery compared to 0.6% of all ID cards). Driving licences, meanwhile, are least likely to be forged (only 0.18% of forgeries). The absolute majority (87.5%) of faked Brazilian IDs are printouts, highlighting the high share of non-professional fraud attempts in the country. Physical ID forgeries (7.5%) come second and digital ID forgeries account for about 5%.
When attempting to bypass verification, fraudsters used desktop applications more often than mobile ones: 0.8% of total web sessions were marked as fraudulent attempts, compared to 0.5% of mobile sessions. Fraudsters do not appear to prefer either Android or iOS in terms of the devices they use.
The two most fraud-prone industries in Brazil are investment and payments. The crypto, gambling and trading industries also suffer from fraud, although to a lesser extent.
The findings should give businesses operating in Brazil a clear understanding of local fraud risks and how to deal with them. Sumsub concludes the report with several recommendations on reducing identity fraud when doing business in Brazil.
“Sumsub has over five years experience onboarding applicants from Brazil. In this time, we’ve improved the median verification time for local users significantly–reducing it from more than 3 minutes in the first half of 2021 to less than a minute in 2022. While Sumsub reaches over 90% pass rates in Brazil, fraud protection at the onboarding stage is no less crucial for our team,”
— says Andrew Sever, Co-founder and CEO of Sumsub.
“To effectively fight fraud in Brazil, we recommend that businesses choose a decent KYC/AML partner. Make sure that your provider is able to validate user documents via SERPRO, perform facial biometric (liveness) checks to ensure that applicants are real and physically present during verification, and track behavioural risk signals. Besides, a range of antifraud technologies should be applied to quickly evaluate document authenticity and detect any suspicious features, such as signs of physical forgery or graphic editing,”
— adds Guilherme Terrengui, Country Manager for Sumsub in Brazil.
Sumsub’s in-house technologies allow business clients to stay fully compliant with local and global regulations, achieve the strongest degree of fraud protection, and the highest possible pass rates. Our conversion rates are industry-leading—91.64% in the US, 96.37% in Argentina and 94.16% in Mexico. You can learn more in our case studies with Nicehash and CakeDefi.To download Sumsub’s Brazil Identity Fraud Report 2022 (in portuguese), please follow this link: https://sumsub.com/brazil-fraud-report
