How to Identify Fake Documents: Essential Tips and Techniques

Identifying Fake Documents

Fake documents — the Achilles' heel of financial institutions — are rising. 

The prevalence of fake documents continues to escalate, posing significant challenges to financial institutions. Digital transformation has streamlined application processes, benefiting both applicants and underwriters. However, it has also opened avenues for criminals seeking to defraud banks and creditors.

Identifying fraudulent documents is increasingly difficult as digital applications accumulate, leading to substantial backlogs. This not only hampers productivity but also complicates the detection of counterfeit documents.

Recent reports highlight the growing issue:

• Inscribe's 2023 Document Fraud Report revealed a threefold increase in the detection of fraudulent document templates in 2022, indicating a surge in the online purchase of fake documents.
• TrustID's 2023 analysis found that passports accounted for 48% of all fake documents detected, underscoring the need for vigilant verification of commonly falsified identification forms.

The rise in fraudulent identity documents adds to the already heavy workloads associated with underwriting and account opening.

Fortunately, artificial intelligence (AI) offers solutions to this challenge. Before delving into AI's role, it's essential to understand the nature of fake documentation and methods for detection.

Fake documents can lead to serious consequences. If you want to identify fake documents, this guide will help you. We’ll show you how to spot common forgeries in Social Security cards, bank statements, and birth certificates. You’ll learn specific visual, tactile, and technological methods to verify authenticity and protect yourself from fraud.

See how Inscribe detects fake documents

What is the difference between forged and fake documents?

Fake Documents

A fake document is an identity document that wasn't officially produced or recognized. These can vary depending on the use case. For example, a fraudster may illegally produce an entirely fake driver's license or Social Security card to use during a loan application process.

Sometimes, pseudo documents (completely fake documents with made-up names and details) are easy to spot when they're missing seals, numbers, or other identifiers. Other times, it's not so simple, especially if the fraudster is skilled.

Forged Documents 

Forged documents, on the other hand, are authentic but have alterations. For instance, someone alters a photo or changes the name or birthdate printed on an ID. They can even make an entire document look like a different government agency issued it. 

The most common types of forged documents include:

• Fraudulent passports
• False driver's licenses
• Forged account numbers and signatures on a check
• Forged signatures on contracts and invoices
• False birth certificates

If there's a document identifying a person, then odds are that fraudsters will use it to create fake or forged documents.

What are the 3 types of document forgery?

There are three types of forgery: freehand simulation, tracing, and electronic manipulation. Here's an overview of each:

• Freehand simulation: When a fraudster attempts to copy a signature, handwriting, or design using copies of the original documents. 
• Tracing: Reproducing handwritten text, signatures, and designs using transmitted light or carbon tracing, where the fraudster places a blank sheet over the original and traces text and design elements. 
• Electronic manipulation: Using photo editors to copy signatures or information and paste it into a fraudulent document. 

Recognizing common types of fake documents

Fake documents come in many forms, each with unique markers that, when identified, can help you discern their authenticity. Fraudsters often create pseudo-documents with fake information when they cannot access original documents, making it crucial to recognize the types of fraudulent documents most commonly forged, including the forged document and the genuine document.

Social Security cards, bank statements, and birth certificates are some of the most frequently counterfeited documents, often altered for employment verification or financial gain.

Social Security Cards

Social Security cards are often targeted by counterfeiters due to their importance in identity verification. Indicators of a counterfeit Social Security card may include missing security features such as holograms or seals.

Counterfeiters frequently struggle to replicate tactile features, which are significant in verifying a document’s authenticity. Genuine documents may have tactile features such as intaglio printing, embossed seals, and laser engraving, which are difficult to duplicate.

Bank Statements

Bank statements are another common target for fraudsters, who often replicate the layout and visual elements of legitimate bank documents to make fake statements look genuine. Indicators of falsified bank statements include discrepancies in transaction histories and unusual formatting.

Vigilance and scrutiny of bank statements for inconsistencies are key to detecting fraud.

Birth Certificates

Birth certificates play a crucial role in identity verification and are often forged to create false identities. Authentic birth certificates usually contain identifiable markers, and discrepancies can suggest alterations or forgeries.

Identifying these markers and verifying the document’s integrity can reveal fake birth certificates.

How can you tell if a document is real or fake?

There are several ways to determine whether a document is genuine or fraudulent. In the finance industry, commonly faked identity documents include bank statements, paychecks, IDs, Social Security cards, and insurance policies. The typical documents required to apply for loans, credit cards, mortgages, car loans, and insurance. 

Finding alterations in these documents is crucial to determining their authenticity. A forged document used to be possible to detect with the naked eye using high-powered magnification. Not so much today, thanks to technological advancements.

Visual inspection

When inspecting documents, it is essential to identify any signs that may indicate forgery. Documents should be evaluated for facial validity and expected quality, focusing on the insignia of the issuing agency and intricate design elements. A forged signature typically appears less confident, lacking the smoothness characteristic of genuine signatures.

The fluidity of signature strokes can indicate whether a signature is authentic or forged. Other things you can look for include:

• Missing or altered numbers
• Errors in the data (e.g., misspelled names)
• Altered text or images
• Unusual formatting
• Mismatched logos and addresses

You can also compare documents to official databases to find inconsistencies, including possible cases of false documentation. For instance, if a lot of your customers use Wells Fargo, Capital One, and other known banks, you can verify the authenticity by looking at their statements. 

Tactile examination

High-quality documents often feature distinct tactile elements like intaglio printing and embossed seals. Tactile features play a critical role in verifying the authenticity of documents, as they provide physical elements that can be assessed by touch.

The absence of these tactile features can be a strong indicator that a document may be counterfeit.

Specialized technology

Unfortunately, this isn't always enough to detect a counterfeit document. Photo editing tools allow criminals to manipulate photos and graphics quickly, making it challenging to catch cases of false documentation solely through visual inspection. So if you're relying solely on visual inspection, it'll be challenging to catch. 

AI-powered fraud detection tools can help identify inconsistencies in documents, streamlining the verification process. These tools can detect financial fraud through false bank statements, requiring forensic examination to validate document authenticity. Inscribe is an AI-powered fraud detection and automation platform that identifies inconsistencies in data, fonts, and format, as well as alterations like text boxes placed over documents. 

AI-powered fraud detection is more than a second pair of eyes—it's automated night vision goggles verifying the authenticity of documents. 

Why do people use false documents?

People use fake documents for many reasons. Someone who wants to buy a home, but works under the table, won’t have tax returns or pay stubs to prove their income level. So they may create pseudo documents to trick a loan officer into granting them a loan. 

Outside of the financial industry, you'll find folks using fake passports or other forms of fake paperwork to gain entry into different countries.

And most recently, you'll see people showing fake vaccination cards to gain access into their jobs or sports arenas. 

Some knowingly risk their freedom and financial well-being to commit loan and credit card fraud. It's a federal crime that can land them behind bars and/or with a hefty fine. This is true for both the creator of the pseudo document and those using it. 

How does someone get fake documents?

There are several ways criminals get their hands on false documents. Some create and modify documents themselves, while others purchase them from hackers or the dark web. 

Data breaches are a gold mine for scammers looking to steal identities and create fake or pseudo documents, such as fake business documents. It's also possible for criminals to skim the web and piece together information about individuals using social media and websites. 

Hackers like to take advantage of unsecured internet connections or swipe wallets and purses from unsuspecting patrons in shopping centers. Some may even steal from those closest to them in order to create fake documentation. 

How does someone falsify documents?

Some documents are easier to falsify than others. All one needs to alter a bank statement or paystub is the original financial document and the right software to duplicate and manipulate it. 

Scammers will try to design fake documents using the same layout, formatting, colors, and fonts that would appear on the authenticate version. This is possible using an original version and turning it into a modified document or duplicating it into a fake document that was designed to look like an original with software. 

Here's an overview of several ways fraudsters falsify documents. 

Creating a new document

If a fraudster can't get their hands on an original document (or if it's difficult to alter), then they'll create a pseudo-document. In most cases, the new version will contain fake information, such as a fabricated company or authority that "issued" the document.

This is a common scenario if there are samples of documents publicly available online. For example, a fraudster completing a loan application may use falsified pay stubs as proof of income. 

Modifying the original document

If a criminal can steal a check, driver's license, or other original document, then they can modify it to look as if it belongs to them. This is done either manually or digitally using software. 

Often, modifying an original document includes changing company names, logos, beneficiary or account holder details, and adding text or numbers. For instance, using an actual bank statement  or utility bill, but altering the name and address. 

Criminals may also attempt to steal legitimate blank document templates, and print falsified information on them. This is more challenging to detect since the proper seals and other identifiers are present. 

Forging identities

Since most loan and credit applications are digital today, it's easier for fraudsters to submit real documentation that doesn't belong to them. For example, submitting an application using a stolen identity. 

This is possible if they have access to physical or digital versions of other people’s IDs, Social Security cards, passports, bank statements, and so on.

These methods are popular among scammers because it's easy to pull off behind the veil of a computers and the internet. All criminals need is adequate software knowledge and design skills to create forged, manipulated, or counterfeit documents. 

Legal implications of using fake documents

Using fake documents can lead to severe legal consequences, impacting both personal and professional lives. Falsifying documents is a criminal offense and can lead to legal actions, especially when involving falsified information.

Using fake documents carries risks of legal prosecution and long-term impacts on personal and professional life.

Criminal charges

The Fraud Act 2006 and the Health and Safety at Work Act 1974 address document falsification. Forgery can result in penalties including up to 5 years of imprisonment and fines of up to $25,000. Charges can be state or federal, and classified as misdemeanors or felonies.

Employment consequences

Employees caught falsifying documents face possible dismissal and loss of trust. Employers must conduct a full investigation and follow the Acas Code of Practice before dismissing an employee.

Financial sector impact

Fake documents increase operational burdens for financial institutions, complicating fraud detection. In 2019, identity fraud caused US businesses to lose 17 billion dollars. The rising prevalence of fake IDs exacerbates the issue.

AI solution to ease fake document challenges

So how do pseudo documents impact financial institutions in the real world? A report from Javelin shows US businesses saw an astounding $17 billion in losses because of identity fraud in 2019.

Fake identities and documents are damaging businesses in the financial sector—something Crédito Real knows all too well. Unfortunately, using manual methods prevents companies from resolving the growing issue. 

At Crédito Real, verifying documents created fiction and inefficiencies. Analysts manually reviewed each document, ensuring consistency and accuracy of IDs, income, tax declarations, addresses, and more. 

This can take 30 minutes or more per application, eating up hundreds of hours weekly. Then even the best document expert can overlook credible-looking documents. In these instances, fraud goes undetected until further down the line, costing the business more because of legal fees and recouping goods from fraudsters. 

After adopting Inscribe, Credito Real made document reviews 10x faster and saved $100k each month by detecting fraud earlier. Best of all, what normally required hundreds of hours a week now took seconds to perform. This was possible using Inscribe's automated easy-to-use technology.

Make fake document protection faster and easier with Inscribe

Fast document processing is critical in the fast-paced world of finance. Your customers expect quick approvals, and you want to keep them happy (without sacrificing security). So being able to identify acceptable documents on the fly is critical. 

Using AI reduces friction in the application process and safeguards your company from fraud risk. Your forensic document examiners and underwriters will thank you. 

If you need to reduce document fraud, then Inscribe may be for you. Speak with one of our experts to find out today.

Frequently Asked Questions

What are the most commonly forged documents?

The most commonly forged documents are Social Security cards, bank statements, and birth certificates, which can undermine personal and financial security. It's crucial to ensure the authenticity of such documents to protect against fraud.

How can I tell if a Social Security card is counterfeit?

A counterfeit Social Security card can often be identified by missing security features, like holograms or official seals. Always verify these elements to ensure the card's authenticity.

What are the legal consequences of using fake documents?

Using fake documents can lead to serious legal consequences, including criminal charges, imprisonment, fines, and potential job termination. It's crucial to understand the gravity of such actions to avoid these severe repercussions.

How can technology help in detecting fake documents?

Technology, particularly AI-powered fraud detection tools, greatly enhances the ability to identify inconsistencies in documents, making the verification process more efficient and reliable.

What are some expert tips for preventing document fraud?

To effectively prevent document fraud, maintain physical copies of important documents, use complex signatures, and consider employing video evidence during the signing process. These measures can significantly enhance the authenticity of your documents.