Document forgery has been a known crime ever since people became aware of writing and the alphabet. According to “Forensic Document Examination”, laws against forgery date back to 80 BC, when the Romans banned the falsification of documents that were used to illegally pass ownership from one land owner to another.
Today, document forgery remains a common white-collar crime, which typically involves changing a real document and creating a fake. For example, deceiving someone by singing in another person’s name. When it comes to identity documents, this is also a common practice in order to use someone else’s identity to gain personal benefits or conduct further crimes. For instance, taking out a loan using another person’s ID document.
The most common types of forged documents to this day are fraudulent passports and driver’s licenses. Sometimes, minors use fake ID documents for age-restricted services, like e-commerce platforms that sell alcohol. This is why all sorts of businesses, both operating online and in physical locations, need to build proper verification systems that can combat document forgery in a way that doesn’t disrupt customer experience.
What is Document Forgery?
Document forgery is the practice of illegally creating or changing documents with the goal of deceiving others. This makes forged documents a type of forgery where real documents are altered without permission. Bad actors often commit this crime in order to make the documents look legitimate for identity theft, financial gain, or to avoid some sort of legal responsibility.
People commit document forgery by:
- Altering real documents
- Using stolen forged documents
- Combining data and making new forged documents
In general, forgery can also happen when someone pretends to be someone else. This includes various crimes, such as signing another person’s name on a document, using another person’s login details to access confidential data, or impersonating an official.
Fake Documents vs Document Forgery
If a document has false information, it doesn’t automatically make it forgery. Fake documents and document forgery may seem similar, but they differ in how they are made because:
- Fake documents simply imitate real ones,
- Document forgery involves modifying actual documents.
For example, document forgery is using someone else’s signature. However, writing a check from a bank account that doesn’t have any money is not forgery, even though the person is pretending to have the funds.
What are Some Commonly Forged Documents?
Traditional physical passports remain the most commonly forged ID documents. The cost of issuing legal identity documents reflects the complexity of forging the document’s security features. Other factors, such as the country’s level of technological advancement, also play a significant role. However, scammers sell forged documents and fake passports at low prices on the dark web. For example, you can purchase a fake Australian passport for less than $200.
Other elements that are typically easily forged are signatures. Since they can be found on any document, people tend to forge signatures often. For instance, they fake signatures on school reports, vaccine testing forms, voting papers, court documents, and so on.
Categories of Forged Signatures
Forging signatures can both happen in the physical document sphere and online. However, these are the most common categories that describe traditional signature forging methods:
- Tracing. Traced signatures are based on pen pressure and can show abnormal pen lifts or rests. In this case, microscopic examination reveals the signature’s indentations or traces of the original mode that was used to create the forgery.
- Freehand simulation. This category is known to imitate genuine signatures but shows flaws in its execution. For example, the line quality, stroke continuity, or letter formations.
- Spurious signature. This is the most flawed type of forgery. Forgers without a model use it to create detectable signatures, often trying to blend elements of the genuine signature with their own handwriting.
Why is Detecting Forged Documents Important?
Fraudsters use fake documents to carry out illegal transactions, open new accounts, obtain loans, and more, escalating to such matters as laundering funds under another identity. For businesses and financial institutions that are used in such crimes, this means a tarnished reputation and major financial losses.
As a result, companies should prioritize document verification to detect fake and altered documents and protect themselves from negative consequences. Document verification is part of a bigger Know Your Customer (KYC) onboarding process, which is a mandatory ID verification practice in many regulated sectors.
However, checking for forged documents not only helps verify the authenticity of an individual but also helps build a proper internal risk assessment and checks if potential users and business partners pose any risks to your company. That said, accepting genuine documents is especially important for identity verification, employment, travel, finance, and legal matters.
The Consequences of Accepting Forged Documents
Accepting a new user registration with a forged document means allowing fraud to step in through the door. Of course, the level of various negative consequences depends on the intention behind the forgery.
Typically, forged documents for businesses can result in:
- Damage to the brand, resulting in decreased customer trust.
- Safety risks for customers due to potential account takeovers.
- Financial losses and increased operational expenses.
- Legal penalties, including criminal and non-compliance charges.
For regulated entities, failing to meet KYC and anti-money laundering (AML) requirements can even lead to limited access to financial services like banking and payments. Non-compliant entities risk account closures, or being blacklisted by other institutions, cutting off access to the mainstream financial system. That’s why financial institutions facing systemic non-compliance can undergo enhanced supervision like on-site examinations or external audits.
Are Counterfeit Documents Really a Global Issue?
Document forgery can take various forms, but they all share the same mission to financially exploit individuals. This is a global problem since scammers around the world alter common documents such as passports, IDs, driver’s licenses, and work permits. In general, last year, people lost $10 billion to fraud, $1 billion more than in 2022, making it the highest loss ever reported to the Federal Trade Commission (FTC).
Countries with weaker security measures in government-issued ID documents, such as passports, tend to have higher rates of forged ID documents. For example, countries like the United Arab Emirates heavily rely on construction workers. Such specialists who migrate from abroad need to obtain working visas, leading to an increase in forged passports and visas related to certain regions.
An Example of a Forged Document Case
Let’s imagine a scenario where a person finds out that someone else used their identity to forge a document. For example, a college student receives an email from their university’s financial aid office informing them that their request for additional financial aid has been approved.
Despite the email, the student didn’t submit such a request themselves. Later, they ask the faculty to see a copy of the email as proof and discover that someone else has forged their signature in an attempt to fraudulently obtain more money for their studies. For example, a roommate who had access to their computer might be responsible for the forgery.
What are the Common Types of Document Forgery?
Document forgery is a widespread crime, with thousands of arrests each year. Fraudsters often use forged ID documents to enter new countries, creating entire sets of fake documents, such as passports and driver’s licenses, to facilitate their illegal activities.
To combat this issue, it’s important to know the key types of document forgery methods. These include:
1. Counterfeit Documents
A counterfeit document is a fully fabricated legal document that looks similar to a near-perfect copy of the original one. It affects different documents, including national IDs, passports, social security cards, driver’s licenses, etc. As a way to prevent counterfeiting, governments have created various document security features. However, with digital advancements and AI, fraudsters have become more sophisticated and use special equipment to replicate holograms, watermarks, and similar details.
Tip: To detect counterfeit documents, look for holographic elements and color-shifting inks.Counterfeit documents can have poor imitations that don’t change color or lack clarity in detail.
2. Manually Altered Documents
A manually altered document is a type of forgery that involves adding or correcting information while keeping the original document mostly unchanged. This means that the document can be modified by catering to critical information, such as personal details, or by altering images.
This document forgery type is commonly used to deceive systems that rely on visual document verification. For this reason, companies that need to remotely onboard users typically use extra selfie verification checks for high-risk users to verify both the document and the person’s biometric features.
Tip: If a document has inconsistent font types or appears misaligned, it can signal tampering. Other signs, like documents altered to modify dates, can indicate potential fraud as well.
3. Digitally Manipulated Documents
A digitally manipulated document is an electronic forgery method, often backed by some sort of software to alter or create forged documents. This type of image manipulation can be challenging to detect as it seamlessly integrates into digital documents. Digitally manipulated documents can be created using scanned copies in photo editing software or creating entirely new documents using well-known publishing tools like Photoshop.
Despite that, AI and machine learning have made it easier to detect this form of forgery. Forged documents can be identified by analyzing the visual structure or metadata to check if the document is fake or not.
Tip: Sometimes, digital document manipulations can have slip-ups, such as missing numbers, data entry errors, poorly altered security features, or edited logos that are easily traceable.
How Do You check if a Document is Genuine?
There are certain nuances that you should examine when determining the legitimacy of the document. Fraudsters replicate all sorts of details, such as the codes found in genuine documents such as national IDs.
Despite that, identifying red flags helps detect forgery, including these fraudulent signs:
- Watermarks. Check that all these security features are accurate and use direct light to inspect reflections.
- Paper quality. Look for inconsistencies in texture, color, and the overall quality of the document. Compare it with another document that you know is authentic.
- Margins. Misaligned text, irregular spacing, and uneven margins are all signs of forgery.
- Overall appearance. If the document is unusually new or old compared to the issuing data — this can raise suspicion.
Related:
What is Automated Document Verification?
Automated document verification is a digital process of a broader identity verification procedure, which is designed to both confirm the identity of a customer and verify their provided document, ensuring that it’s real and authentic.
Typically, the process of streamlined document verification involves the following steps:
- The user provides personal data, such as name, date of birth, or address.
- They are then asked to verify this data by uploading a photo of their identity document.
- The system then checks the data and the document for authenticity.
- If it matches, the user is approved and allowed to access the services, such as registering on an iGaming site.
In general, financial institutions and other entities like crypto exchanges or fintech businesses use this type of document verification technology to comply with Know Your Customer (KYC), Know Your Business (KYB), and anti-money laundering (AML) compliance regulations, which require mandatory user ID verification.
Benefits of Mitigating Document Forgery with Automated Document Verification Solutions
Manual document verification methods have proven to be prone to human error. More importantly, checking various documents without any sort of automation is labor-intensive and bad for the end-user experience. That’s why businesses that want to mitigate document forgery more effectively choose automated document verification solutions.
This helps find the right balance between ensuring a secure process and a seamless experience for the customer, among other benefits, such as:
- Effective fraud prevention. Even for those who are not legally required to verify documents, this measure helps reduce identity theft and other similar risks.
- Faster customer onboarding. Instead of waiting for days, users can be accepted and onboarded within a few minutes tops.
- Increased customer trust. Adding document verification and ensuring the authenticity of all users adds a sense of security for the customers, ensuring that their data is taken care of.
So, verifying the authenticity of documents, combined with AI-powered ID verification and AML screening solutions, can help you combat document forgery and minimize the increasing risks of fraud. At iDenfy, we can help you streamline your document verification process as well as mix and match your KYC/AML/KYB measures with other fraud prevention solutions, like customer risk assessment and more.
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