Online users’ data was never secure, first it was used for blackmailing and now for identity frauds. The most common way of committing identity fraud is by taking or stealing an authentic user’s digital identity.
“Identity theft is a cybercrime where users’ personal or financial details are stolen or hacked and then used to create a replicated fake identity over the internet”
By creating an online fraudulent identity, the criminal can use it for making unauthorized payments or purchases. With technological advancements, the methods of identity theft have become more sophisticated. Now normal prevention techniques can’t protect against identity thefts. Businesses need an online identity verification solution that will validate and authenticate the entry of users to their platforms.
Types of Identity Frauds
The best example of identity theft is fake social media accounts. A cybercriminal can open a social media account through another user’s information. There are numerous fake accounts on social networking websites. Currently, social media platforms are using normal identity verification.
Let’s have a deeper look at different types of identity theft and how it can be mitigated through identity verification.
Medical Identity Theft
The unethical use of medical information or patient history for claiming health services. The motive can also be getting prescribed-only drugs and other facilities that only a legitimate patient can have. False medical billing is a result of medical identity theft. Fraudsters use the medical services in another person’s name. In this scenario, the victim has to pay the bill. If there are multiple cases of medical theft, a hospital can have dissatisfied customers. The decreasing number of customers will cause a heavy cut in revenue.
This is done by professional hackers and people close to the victim also. The reason is they have easy access to the medical records and possess little chances of getting caught.
Financial Identity Theft
The financial information of a customer is cracked like a bank statement along with an id card. The purpose is to get financial benefits through funds transfer and crooked transactions. Financial identity theft can also be done to launder money. As financial institutions are the foremost target of financial crimes, identity theft can also be done to commit that.
Credit card scams are an example of financial identity theft. Stolen credit card numbers are used for online shopping. Criminals purchase products and while checkout they give the fraudulent credit card number. The actual holder of the credit card has to pay the bill. He might issue a chargeback or sue the merchant for not protecting his information. Ultimately, it is the duty of the merchant to verify the payment information.
Online Identity Verification for the Rescue
The simple answer to stop identity frauds is by verifying all users before onboarding. There are different methods of verifying uses, but know your customer (KYC) is the most reliable one. KYC is the procedure of online identity authentication used by financial institutions. They are obliged to perform KYC/AML compliance under regulations by global authorities. KYC is performed by artificially intelligent software that can verify a document’s authenticity and information and facial biometrics. The software is trained enough to spot any fraudulent attempts, either in documents or in data.
Process of KYC
As conventionally, a user onboards by giving his personal details to the online form. Personal details are the information that uniquely classifies different users like their names, birth dates, and addresses.
This is the step of verification, the user has to upload a live selfie and an id document to the KYC software. The required details are plucked from the document and matched with the user-entered data. Facial recognition is performed on photo id and the live selfie.
Wrapping It Up
Businesses can streamline and safeguard their channels by using online identity verification services like KYC. As the service is software-based, it can smoothly be integrated into any business website. This will allow only authentic and legitimate users to access the business services.