Combating Document Forgery - a Сomprehensive Guide

Forgery has been on the rise in recent years. A 2023 report found that millennials are 44% more likely to lose money to fraud than older individuals. This can contribute to the loss of millions from what might seem like a simple attack.

Combating document forgery is crucial for financial institutions and businesses as it can damage the business's reputation, affect economic stability, and cause financial loss for businesses and customers.

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What is document forgery?

Forged documents are a form of document fraud in which authentic documents are altered or changed without legal authorization. There are many reasons this may be done, but it is often intended to appear legitimate in order to obtain financial gain, conduct identity theft, or evade legal obligations.

The goal of using fake documents and document forgery may appear similar, however, where the difference lies in how they are created. While a fake document may only mimic a genuine document, document forgery utilizes files from legitimate sources and later modified. For instance, document forgery can use another individual's signature, which may be traced in a legal document for approval.

Checking for forged documents enables you to verify the legitimacy of a company or individual and detect if they are a risk to your business and customers.

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The implications of forged documents

For a business or financial institution, there are many ways forged documents can impact your organization. The intention of a forged document can affect how severely it might impact a business or financial institution.

• Financial losses for businesses in cases of theft from identity document forgery, and even increased operational costs for recovery
• Legal and regulatory penalties based on criminal charges and even civil lawsuits
• Damaged business reputation from losing trust in customers
• Safety and security risks for customers when their data might effectively get leaked in the process

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Common types of document forgery

There are many ways one can create forged documents. Understanding the different types of document forgery allows you to be more thorough in document verification. Here are some of the most popular methods businesses and financial institutions might encounter.

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Counterfeit documents

The goal of creating a counterfeit document is to produce a near-perfect replication of an existing document. Many sophisticated techniques and specialized equipment are often used to mimic security features for important documents, such as watermarks, security threads, and holograms.

Some of the most common types of counterfeited documents include:

• Identity documents like personal IDs
• Passports
• Foreign currencies
• Other legal documents with government seals

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Manually altered documents

Physical or manual alteration involves making changes to an existing official document. This can be done by adding, removing, or modifying text or images. Some techniques that are often used include erasing or overwriting information, using correction fluid, or physically cutting and pasting pieces of the document.

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Electronic manipulation

Digital forgery involves using various software to alter or create documents electronically. This may be a harder type of manipulation to detect because it can be done seamlessly into a digital document.

Electronic manipulation can range from editing scanned copies of documents in photo editing software to creating entirely new documents using desktop publishing tools like Photoshop. Some examples of documents that can be electronically manipulated include:

• Fraudulent passports
• False driver's license
• Digital signatures
• False birth certificates

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Document assembly

This type of forged document can seem like a collage, sourced from legitimate documents. This technique involves piecing together elements from multiple documents to create a new, fraudulent document. It can be done physically by cutting and pasting printed materials or digitally by combining scanned elements from different sources.

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Blank stealing

Blank stealing involves using the blank form of an original document, such as checks, certificates, or letterheads, and filling it out fraudulently. This method relies on the authenticity of the blank documents to lend credibility to the forgery.

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How to determine forged documents

Detecting forged documents is critical in preventing fraud and ensuring the authenticity of important documents. The best approach to detecting any forged document is to use know-your-business (KYB) and know-your-customer (KYC) processes. These processes often dive deep into verifying customers' legitimacy and risks based on their data, transactions, and behaviors.

Here are several techniques and tips for identifying potential forgeries.

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Cross-check the genuine document

A document examiner must look at an authentic government document or be familiar with its nuances to effectively find any discrepancy that may indicate it is a forged document.

Here are some qualities of an original document to watch out for:

• Paper quality: Check the paper for inconsistencies with what is expected from a genuine document, such as its thickness, texture, or color.
• Watermarks and security features: The easiest way to tell the difference is to look at these features under direct light. Many official documents have embedded features that are more challenging to replicate perfectly.
• Alignment and margins: Simple aspects like misaligned text, uneven margins, or irregular spacing can indicate alteration or fabrication.
• Wear and tear: The age of a document is a useful way to check for legitimacy. An oddly new appearance for a supposedly old document or vice versa can be a red flag.

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Peruse tools for detection

Often, using special tools for reviewing documents can help streamline the verification process. Here are some tools to help with manual examination for physical documents.

• Magnifying glasses: Using a magnifying glass to inspect small details not usually well-replicated in forgeries, such as fine print for terms and agreements.
• Ultraviolet light: Some documents have clever security features only visible under UV light. A fraudster new to forgery may not incorporate this well into their attempt to create a falsified document.
• Forensic analysis: Advanced cases might require forensic document examiners who can conduct detailed analyses. An expert should be able to look into ink age determination and paper fiber analysis.

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Implement false document verifications

There are many advances in technology for fraud detection. Implementing these features into your business's document verification process can be beneficial. With this in place, you can quickly verify the authenticity of data with streamlined processes when reviewing legal and personal documents.

Advanced technologies can look into several things like:

• QR codes and digital seals: Modern documents these days might include QR codes or digital seals that can be scanned to verify their authenticity against official databases.
• Digital forensics: For electronic documents, you can utilize metadata analysis and digital forensic techniques to reveal any unauthorized alterations. Sometimes, you can even check for the origin of digital documents.

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Work with an efficient fraud detection software

Some fraud detection software uses technology like AI and machine learning to conduct KYC and KYB procedures. This can help safeguard your business in real-time with speed.

Arguably, the biggest benefit of utilizing fraud detection software is the ability to access a wider database to cross-check and verify data. This can help ensure your reviews are accurate and well-informed.

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Motivations for document forgery

Understanding the motivations of forgery with documents prepared for opening accounts with your company is key to recognizing the potential risk and context in which forgery might occur. Some common motivations for document forgery include the following.

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Financial gain

The most common motivation is financial profit. Fraudsters use falsified documents for this purpose, including forging checks and financial documents to secure loans or funds unlawfully and creating counterfeit currency.

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Identity theft

Identity theft involves stealing another individual's identity. Forging documents like IDs or passports allows individuals to assume someone else’s identity, and is used for various illegal activities, including opening bank accounts, applying for loans, or evading law enforcement.

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Avoiding legal consequences

There are many legal issues, penalties, and fines people might want to avoid. For this reason, they might forge legal documents such as court orders, driver's licenses, or administrative documents.

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How to combat document forgery

Combating document forgery requires a multifaceted approach that involves a combination of advanced technology, legal measures, education, and vigilance.

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1. Start with advanced security measures

Security measures are the best starting point in your verification process for checking for signs of forgery. One way to do this is to check watermarks, holograms, and microprinting.

The next two options are scanning digital signatures with encryption and looking into biometric verification. These options are backed by data and advanced security measures to help smooth out any KYB and KYC process.

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2. Utilize digital document verification systems

Implement blockchain technology or other secure databases for document verification, allowing for the authenticity of documents to be verified against an immutable ledger.

You can also look into using QR codes or digital certificates that can be scanned to confirm the document’s validity directly from the issuing authority's database.

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3. Update and audit your workflow

Periodically review and update security features in response to emerging forgery techniques. Conducting regular audits of your customer's documents, especially those critical to financial, legal, and security processes, will go a long way in ensuring their integrity and authenticity.

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4. Comply with legal and regulatory measures

One of the benefits of using fraud detection software is that you can rest assured you comply with laws and regulations around verification processes. They can also scan for document issuance, verification, and forgery, as well as provide the right intel on the next steps and penalties for forgers.

It's important as well to get international cooperation to combat document forgery. There is a likeliness, after all, for documents like passports and visas to be submitted. These, of course, have implications beyond national borders.

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5. Conduct regular education and training

Training your employees to recognize the signs of forged documents plays a crucial role in keeping your business secure. This is particularly important for financial institutions, government agencies, and educational institutions.

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Educating your customers on the risks associated with document forgery will also go a long way. You can send notifications and reminders that encourage vigilance in verifying the authenticity of documents they receive.

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Protecting your business from forged documents

There are many ways fraudsters can use forgery. Its implications for the business can be immediate and damaging to not just the business, but other customers as well. Fortunately, there are many ways you can counteract these threats.

One of the best ways to get ahead of any attempts at submitting forged documents is to use reliable business verification software that can detect and prevent fraud. Vespia packs all you need to verify your customers legitimacy and mitigate suspicious activity.

Schedule a demo to see how you can partner with Vespia and protect your business.

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