Identity Theft Frauds – How can you stay a step ahead?

Identity Theft Frauds – How can you stay a step ahead?

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Identity theft is ‘a hot potato’ these days. Every day we come across news of online fraud that happened due to identity theft. The technology advancements have made fraudsters more sophisticated in committing identity frauds. In this case, fraudster carries out an online purchase using a different identity. This enables the fraudster to order items online under a false name and using someone else’s credit card.

Identity verification services can mitigate this fraud right from the root, saving your business. We often relate identity theft with account takeover and credit card fraud, but this is not about it only. There are multiple other types of identity theft that are not related to financial industries only, in fact, every organization having an online presence can fall victim to this fraud; the reason being the lack of identity verification systems and advanced security protocols. To deal with such fraud, it is essential to understand them first.

Types of Identity Theft

To cope with the identity theft issue one should be aware of all the types this term covers. Here are some of the types of identity theft:

Synthetic Identity Theft

Synthetic identity theft is the latest form of identity theft that combines a piece of a person’s original information and some fake information to build a synthetic identity. Due to its hybrid nature (i.e real information combined with fake information) these thieves can go undetected for a long period of time. Even if the synthetic identity fraud is detected, the thieves leave no trace behind to trace them.

Synthetic identity theft is sometimes also used by criminals to prove or convince someone that they are not the same person but someone else. This mostly happens in the case when the fraudsters try to enter the territory from where they have been blacklisted or restricted. Using the synthetic identities they show themselves as other citizens and easily gain access to the region or service. However, you can never know the intentions of the person using synthetic identity.

Child Identity Theft

According to Javelin’s research, 2017 out of all the reported breaches, 39% of the victims of the fraud were children in comparison to 19% of adults. As per another study, more than 1 million children fall victim to identity theft every year.

With the explosion of technology and smart devices, every child is exposed to the use of the internet and mobiles. This makes them the perfect target for identity thieves. From a practical standpoint, no child pays attention to his/her credit card statement, even most of the teenagers don’t do it unless they are up for getting a car or insurance. Fraudsters take advantage of this and use children’s identities to commit fraud and go on undetected for years. By the time parents and children are aware of identity theft, the criminals have already moved onto other prey leaving a burden of long credit reports. 

Medical Identity Theft

Healthcare data breaches are rising. A huge data breach named Anthem breach affected about 78.8 million people in 2017 which include not only the patients but employees too. Medical identity theft is one of the most critical forms of identity theft and also quite difficult to fix. The hospitals and pharmacists both can be fooled by the fraudsters and they aren’t able to differentiate between the fake and original patients. The perpetrators pretend to be someone else to get free medical services and get restricted drugs/ medicines from the pharmacy without getting suspicious. The world health organization finds medical identity theft to be the dangerous one claiming “the information crime that can kill you”. 

Financial Identity Theft

The first thing that comes to mind after hearing “identity theft” is credit card reports and bank accounts. Such type of theft that targets individuals’ financial statements and accounts are known as financial identity theft. With the increased data breaches in the industry, millions of customers’ accounts are compromised every year that results in billions of loss not just for the organizations but for the individuals as well. 

The data stolen from these breaches is sold in the black market, where cybercriminals are already set to impersonate an individual and carryout the illegal activities and fraud. The fraudsters can use credit card information to make unauthorized and fraudulent purchases. Sometimes, they can open new accounts using the stolen information of the individuals.

Social Security Identity Theft

The social security number of the person is the most sacred and critical information that one must not leak under any circumstances. There are multiple people who don’t want to pay taxes and find ways to manipulate tax regulators. Your social security number can be their escape from withholding taxes. The SSN of the person can be the most valuable information for identity thieves since they can register the company or work as independent contractors and can avoid paying taxes by using someone else’s SSN.

How can you Protect Yourself from Identity Theft Frauds?

           Identity theft is a growing concern. Cybercriminals are gaining grounds. They are coming up with different and unique ways to get to your privacy. You can always stay a step ahead just by taking some of the preventive measures against these identity theft types. These are:

  • Adhere to KYC:

           The intervention of government and regulatory agencies enforcing the businesses to meet the know your customer (KYC), Customer Due Diligence (CDD), Anti-money laundering (AML) compliance. Failure to do so can land them into some serious legal liabilities imposing a hefty fine and even imprisonment.

  • Use Identity Verification Solution:

          To deal with fraud and enhancing customer experience while meeting regulatory compliance, it is essential for businesses to adopt the latest identity verification solutions. 

  • SaaS-Based on Hybrid Technology:

          The services based on hybrid technology (i.e. artificial intelligence and human intelligence) can verify the identity of a person in real-time and detect the fake and synthetic identities hindering them from accessing the system. 

  • Be Vigilant against Suspicious Activities:

         Always keep a tight eye on your financial statements and go through them every now and then. If you find anything suspicious don’t wait for the action first, report it immediately to the respective organization responsible for it. 

Multiple IT companies are providing such digital IDV services including KYC verification, face verification, AML screening, address verification, and document verification, etc. which make the whole verification process frictionless, saving time and cost. Moreover, it isn’t just the businesses that are responsible for protecting their customers’ identity, the individuals are themselves equally in charge of protecting themselves from fraudsters. 

Identity Theft – One Fraud Multiple Facets

Identity Theft – One Fraud Multiple Facets

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Identity theft is a global crime. All types of identities, including the financial, medical and business identities of common people and business executives are stolen and exploited to defraud businesses and institutions. 

As per the Federal Trade Commission’s (FTC) 2019 report, 1.4 million identity theft fraud reports were processed. A total of $1.48 billion were lost in those frauds. The most common frauds that surfaced were imposter scams, credit card fraud and debt collection through stolen identity scams.  

Symantec’s internet security threat report stated that account takeover fraud rose by 79% and new account fraud rose by 13% in 2018 as compared to 2017. 

These fraud reports are raising unease among the business circles and they are very keen to find an ultimate solution to eliminate these frauds. One of the most common counter fraud techniques employed by businesses globally is real-time identity verification of the stakeholders of an entity. It provides a risk cover while enhancing the compliance and customer onboarding procedures of the company. 

A 2018 survey of identity-theft-related crimes in the UK based banks revealed that banks are using enhanced due diligence tools (online identity verification, and AML compliance tools) to mitigate the risk of identity fraud with them.

Industries targeted by identity thieves 

Contrary to the common notion, all types of businesses are targeted by identity thieves. Whether it is a financial institution or a non-profit organization, all industries are the targets of identity-theft-related fraud. 

Every business has a unique business model, but fraudsters do find a way to invade the protocols using a stolen identity. The following discussion will provide an insight into how a stolen or fake identity can take different facets to defraud several businesses. 

Financial industry

Key motive behind fraud is monetary gain. So, fraudsters commonly target financial institutions. And most common frauds conducted with a stolen identity are credit card fraud, account takeover fraud, money laundering, mortgage fraud, and wire transfer fraud, etc. 

Insurance institutions, mortgage houses, banks, stock exchanges, investment companies, etc. are the common victims of these frauds. 

A 2018 survey of Insurance Information Institute(III) of the USA revealed in its 2018 survey that 3 million identities were stolen in the USA alone and more than 50% of those identities were used to defraud businesses. 


Fintech is growing at a rapid pace. Fintech startups raised more than $16.4 billion in VC/PE investments. The growth potential of fintech is huge, so is the risk involved in this industry. Technological solutions used to transform the traditional financial processes have left some loopholes for cybercriminals. 

Common frauds in fintech using stolen identities are money laundering, payment frauds, illegal funds transfer, etc. 

Online payment solutions, cryptocurrency exchanges, online mortgage, and rental service providers, etc are common victims of these frauds. 

One instance of fraud in fintech using the fake identity is when inmates in Florida county jail laundered $8000 through bitcoin. The inmates bought fake identities and credit card credentials through the dark web and used them to buy bitcoins. Once the bitcoin was purchased they converted it into fiat and transferred it into mysterious accounts outside the jail. The jail authorities found about this crime when they investigated a certain pattern of fund transfer, from the accounts of inmates. 

If the cryptocurrency exchange would have conducted identity verification before selling the bitcoin, the fraud could have been traced at the very first stage, because the criminals were using stolen identities and credit card credentials to make transactions. 


The healthcare industry is considered a pure industry, free of any fraud. Contrary to the common belief, cybercriminals are posing a threat towards the healthcare sector as well. They target patients, hospitals and other healthcare institutions, equally.

Common fraud in the healthcare sector are getting free medical services and buying prescription drugs using a patient’s identity. These frauds affect the credibility of the healthcare institutions and their doctors. 

1.3 million child identities are stolen every year and these identities are often used to defraud the hospitals. For example, a teenager in the USA was not allowed to donate blood on the basis that she was treated for HIV in the past. When investigated it was found that the identity of that girl was used to defraud a hospital in some other state to get an HIV treatment. The hospital did not verify it’s patient’s identity and gave a clean chit to a person with HIV. 

In another instance, the woman’s identity was used to get free treatment and her medical credentials were manipulated. When the real patient went for heart surgery, doctors cross-checked her medical credentials and found that the data was manipulated. In case the medical credentials would not have been checked the woman might have lost her life. Because the major credentials of her height and age were changed, that is used by doctors to decide medication dose for a patient. 

Such frauds are often conducted with the intention to get free services or prescription drugs but it can affect the credibility of a hospital.  

Education sector

Education is no more limited to brick and mortar schools and universities. Educational institutions are onboarding students online and are providing online courses. Other than the institutions, many online platforms are offering free as well as paid courses and material to the students. 

Commonly the stolen identities are used to imitate a credible students to get free education services. Also, online educational institutions are defrauded to get access to free study material for selling it to other websites.

In case a website is exploited to get a copy of content protected with copyrights, that website will be deemed responsible for the loss of the original owner of the content (books, research papers, etc). Because only a few credible sites are allowed to give access to the books and notes that have copyrights. 

The website loses its credibility if the identity of a student enrolled in an online course is used by an identity thief to attend online courses. Educational institutions and online educational platforms also need to perform due diligence on their participants to mitigate the risk of serving an identity thief. 

Travel/hospitality industry

The travel and hospitality industry caters to a wide range of clientele, so their risk is high. The common frauds that occur in the travel and hospitality industry are, imitating a guest to get free services or travel free of cost. Also, the criminals at large use stolen identities to use the hotel as their hideout. 

The travel industry is exploited by criminals for human trafficking, drug and money laundering. For instance, human traffickers use fake identities to fool the airport authorities to deliver underage children to other states for child labor. 

The above-discussed industries are just a few examples of the risk that stolen identities pose towards several industries. Other common victims that have been highlighted in the news are the e-commerce industry, real estate industry, government institutions, etc. 

How Identity verification is the savior of multiple industries?

Frauds related to identity theft are the risk for several industries. One stolen identity can be used in multiple ways to defraud businesses. Real-time identity verification can identify an individual within a minute.

Identity verification is a feasible and cost-effective solution to mitigate the risk that identity thieves pose towards a business. 

Real-time identity verification not only provide businesses with a risk cover but also helps them in seamless KYC and AML compliance and improves their customer trust. Customers feel more comfortable and secure with companies that run due diligence on their clients without any long delays. Also, it increases the credibility of an organization and prevents any penalties due to non-compliance.

10 Quick Tips Regarding Identity Theft Protection

10 Quick Tips Regarding Identity Theft Protection

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Identity fraud has grown substantially in the past two decades, and unfortunately, it is here to stay. Here we share 10 quick tips about identity protection so that you’d have the necessary knowledge when choosing among the best identity theft protection services. 

The number of people hit by identity theft each year is staggering. In the US alone, this number reached over 16 million in 2017. The stats from the rest of the world are similar. Hence, the rising demand for identity theft services.  

These services monitor personal information on websites, public records, and other credit applications to look for suspicious activity. Click here for a basic intro by the consumer financial protection bureau. The major service providers, besides providing protection against identity theft, offer insurance for the following;

  • Specific out-of-pocket losses
  • Chat room monitoring
  • Public record searches
  • Monitoring black market websites
  • Anti-virus software

10 quick tips about identity verification services

  1. Identity theft protection services basically offer monitory and recovery services. Monitoring keeps an eye out for thieves looking to steal your identity, while recovery service helps to deal with the aftermath.
  2. There are two main types of monitoring services; credit monitoring and identity monitoring
  3. Depending upon your choice, credit monitoring can track your credit reports at different credit bureaus
  4. Credit monitoring services might alert you when;
    • a firm examines your credit account
    • a new credit card account is opened under your name
    • a creditor or debt collector says your payment is late
    • You file for bankruptcy
    • There is a legal judgment against you
    • Credit limit changes
    • There are changes in personal information (name, address, phone number etc.)
  5. Your monitoring service will only alert you when something suspicious shows up on your credit report. If an identity thief steals your social security number or files a tax return in your name, your theft protection service will not inform you.
  6. Identity monitoring services inform you when there are unusual requests regarding your identity. For instance, a request for a change in address.
  7. Identity recovery services help you after the theft. Normally, the trained counselors and case managers help you in recovering your name and finances.
  8. Major identity theft services offer insurance as well. Normally, they only cover out of pocket expenses, for example, in reclaiming your identity.
  9. Putting a security freeze on your credit report will prevent the thief from opening any more accounts in your name. You can unfreeze it free of cost by credit reporting companies – Experian, TransUnion, and Equifax (in the U.S.).
  10. If you suspect that someone has stolen your identity, you can put a fraud alert on your credit report. This will not freeze your account but the new lender will take extra measures to verify your identity. 

Credit monitoring products from credit bureaus generally do not provide robust coverage. They might also reduce your rights to sue them. You should seek identity verification services that give you the best cover. The most comprehensive theft protection service is Shufti Pro. It provides the protection using state of the art artificial intelligence and machine learning algorithms, for a fast and accurate theft protection system.

How Identity Theft Protection Can Increase Your Profit!

How Identity Theft Protection Can Increase Your Profit!

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Identity theft protection is something that is not only a concern for ordinary users anymore. Businesses around the globe are also suffering from this cyberspace menace that functions in more than one way. The biggest reason why Identity theft protection has become such a headache for modern day businesses are the complex mechanism being used by cybercriminals. But before we go in detail that how an online business is at risk of losing revenue because online identity theft, it is important that a background is provided regarding this phenomenon

Why does identity theft happen

Well! The answer to this question is very simple. It is for the same reason that a crook commits a robbery or a criminal performs a carjacking. There can be different methods to hijack someone’s identity but the reason is the same for all such instances: use someone else’s credentials to utilize services or buy items that an identity thief doesn’t want to pay for. Millions of individuals suffer because of identity theft every year and online identity thefts have created a digital medium to exploit ordinary people.

How does identity theft happen online

Like in the real world, there are many ways to steal the identity of a person online. Naive users can be tricked into providing their personal information by posing to be a representative of an established company that wants to provide “extra incentive” to bring you onboard. Smarter criminals are using even more sinister tricks like hacking of large databases maintained by online stores and websites. Financial information stored by banks and financial institutions is routinely raided by cybercriminals that sell such information for a high price in digital black markets.

What to do when identity theft occurs

Well, it is hard to know that whether your identity has been stolen or not until you receive reports of some suspicious behavior or unsolicited purchases that you never made. Sometimes, users come to know about their stolen identity or credentials pertaining to their identity by press releases issued by companies that hold their personal information e.g. a social media website that you had an account on or the bank that provided the mortgage for your home etc.

How to prevent identity theft

There are several identity theft protection tips that can assist you in safeguarding your potential identity from falling into the hands of financial criminals.

  1. First and foremost is to use services of only the top of the line service providers. Such companies have the resources to spend an appropriate amount of money on the digital security of data that they have collected from their customers.
  2. Secondly, while surfing the internet, never provide your vital information to any service that seems shady or less than legitimate. It can be a trap to collect your identity information and use it to rob you of your hard earned money.
  3. Thirdly, never click on links that look suspicious. Web browsers have added features to alert the users whenever they try to enter a website that seems insecure or doesn’t match the necessary definition of a legitimate site.

Business identity theft protection

Although, much of the talk about online identity theft surrounds how a common user should behave online and what kind of information should never be divulged on the internet and the need to spend a serious amount of money on digital security. But more often then not, the debate over online identity protection forgets businesses that are also affected by online identity thefts. Frequent cash back requests received by online merchants because of identity theft cut down a big chunk of projected profits for an online venture.

How can businesses protect themselves from identity theft

Performing proper identity verification for new customers and even for the existing customers can do wonders for an online business. KYC verification software plays a vital role in ensuring that the customers actually own the identity that they claim. Identity verification services such as Facial verification, document verification, and address verification can formally secure businesses from encountering cybercriminals using fake or stolen identities for buying products or availing services.

Increase Your Profit

Once businesses start utilizing a reliable KYC verification service such as Shufti Pro, they are guaranteed to increase their profits by cutting down on frequent cash back requests. It will allow online merchants to properly check their customers before bringing them onboard. Profits will also soar because of higher engagement ratio that can be achieved by analyzing customer demographics and sales pattern based on user activity.

KYC verification from AI backed Shufti Pro will help you establish a relationship of trust with your customers. The legitimacy of your company’s services will be established in the mind of your clientele. Real-time verification results from Shufti Pro will also secure you from bottlenecks that are considered customary with ordinary KYC verification system.


So, if you are looking for ways to earn the trust of your customers, build a loyal customer base and, most importantly, need to boost your profits, then there is no better way than integrating Shufti Pro with your sales platform. We offer bespoke identity theft protection that will bring the number of users with fake identities to ZERO on your website. With features like Universal Language Support and OCR based data extraction methods, Shufti Pro emerges miles ahead of its competition in the KYC industry.

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