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Trusted data is paramount for digital identity verification

Published: August 8, 2017 by Guest Contributor

We live in a digital world where online identities are ubiquitous. But with the internet’s inherent anonymity, how do you know you’re interacting with a legitimate individual rather than an imposter? Too often we hear stories about consumers who see unauthorized purchases on their credit cards, enable access to their devices based on an imposter claiming to be a security vendor or send money to someone they met online only to learn they’ve been “catfished” by a fraudster. These are growing problems, as more consumers transition to digital services and look to businesses to protect them, enable seamless trusted interactions and maintain their privacy.

I recently chatted with MarketWatch about how consumers can protect themselves and their privacy when using online dating apps, as well as what businesses are doing to safeguard digital data. As part of the discussion, I mentioned that a simple, standard verification process companies of all sizes can leverage is vital to our rapidly evolving digital economy. Today, companies have their own policies, processes and definitions of identity verification, depending on the services they offer. This ranges from secure access requiring strong identity proofing, document verification, multifactor authentication and biometric enrollment to new social profiles that do little more than validate receipt of an email to establish an online account.

To satisfy those diverse risk-based needs, more organizations are turning to federated identity verification options. A federated system allows businesses to leverage trusted, reputable, third-party sources to validate identity by cross-referencing the information they’ve received from a consumer against these sources to determine whether to establish an account or allow a transaction.

While some organizations have attempted to develop similar identity verification capabilities, many lack a trusted identity source. For example, there are solutions that leverage data from social media accounts or provide multifactor fraud and authentication options, but they often become easily compromised because of the absence of verifiable data. A trusted solution aggregates data across multiple providers that have undergone thorough security and data quality vetting to ensure the identity data is accurately submitted in accordance with business and compliance requirements. In fact, there are only a handful of trusted identity sources with this level of due diligence and oversight.

At Experian, we assess verification requests against an aggregate of hundreds of millions of records that include identity relationships, profile risk attributes, historical usage records and demographic data assets. With decades of knowledge about identity management and fraud prevention, we help companies of all sizes balance risk mitigation and maintain compliance requirements — all while ensuring consumer data privacy.

Trust takes years to build and mere seconds to lose, and the industry has made undeniable progress in security. But there is much left to do. Consumers are increasingly involved in the protection and use of their data. However, they often don’t realize downloading a hot new app and entering personal details or linking to their friends exposes them to unnecessary risk. It’s important for businesses to be clear about their identity verification processes so consumers can make educated decisions before electing to provide invaluable identity data. The most effective fraud prevention and identity strategy is one that quickly establishes trust without inconveniencing the consumer. By staying up to date on verification methods, businesses can ensure customers have a smooth, personalized and engaging online experience.

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Fake IDs have been around for decades, but today’s fraudsters aren’t just printing counterfeit driver’s licenses — they’re using artificial intelligence (AI) to create synthetic identities. These AI fake IDs bypass traditional security checks, making it harder for businesses to distinguish real customers from fraudsters. To stay ahead, organizations need to rethink their fraud prevention solutions and invest in advanced tools to stop bad actors before they gain access. The growing threat of AI Fake IDs   AI-generated IDs aren’t just a problem for bars and nightclubs; they’re a serious risk across industries. Fraudsters use AI to generate high-quality fake government-issued IDs, complete with real-looking holograms and barcodes. These fake IDs can be used to commit financial fraud, apply for loans or even launder money. Emerging services like OnlyFake are making AI-generated fake IDs accessible. For $15, users can generate realistic government-issued IDs that can bypass identity verification checks, including Know Your Customer (KYC) processes on major cryptocurrency exchanges.1 Who’s at risk? AI-driven identity fraud is a growing problem for: Financial services – Fraudsters use AI-generated IDs to open bank accounts, apply for loans and commit credit card fraud. Without strong identity verification and fraud detection, banks may unknowingly approve fraudulent applications. E-commerce and retail – Fake accounts enable fraudsters to make unauthorized purchases, exploit return policies and commit chargeback fraud. Businesses relying on outdated identity verification methods are especially vulnerable. Healthcare and insurance – Fraudsters use fake identities to access medical services, prescription drugs or insurance benefits, creating both financial and compliance risks. The rise of synthetic ID fraud Fraudsters don’t just stop at creating fake IDs — they take it a step further by combining real and fake information to create entirely new identities. This is known as synthetic ID fraud, a rapidly growing threat in the digital economy. Unlike traditional identity theft, where a criminal steals an existing person’s information, synthetic identity fraud involves fabricating an identity that has no real-world counterpart. This makes detection more difficult, as there’s no individual to report fraudulent activity. Without strong synthetic fraud detection measures in place, businesses may unknowingly approve loans, credit cards or accounts for these fake identities. The deepfake threat AI-powered fraud isn’t limited to generating fake physical IDs. Fraudsters are also using deepfake technology to impersonate real people. With advanced AI, they can create hyper-realistic photos, videos and voice recordings to bypass facial recognition and biometric verification. For businesses relying on ID document scans and video verification, this can be a serious problem. Fraudsters can: Use AI-generated faces to create entirely fake identities that appear legitimate Manipulate real customer videos to pass live identity checks Clone voices to trick call centers and voice authentication systems As deepfake technology improves, businesses need fraud prevention solutions that go beyond traditional ID verification. AI-powered synthetic fraud detection can analyze biometric inconsistencies, detect signs of image manipulation and flag suspicious behavior. How businesses can combat AI fake ID fraud Stopping AI-powered fraud requires more than just traditional ID checks. Businesses need to upgrade their fraud defenses with identity solutions that use multidimensional data, advanced analytics and machine learning to verify identities in real time. Here’s how: Leverage AI-powered fraud detection – The same AI capabilities that fraudsters use can also be used against them. Identity verification systems powered by machine learning can detect anomalies in ID documents, biometrics and user behavior. Implement robust KYC solutions – KYC protocols help businesses verify customer identities more accurately. Enhanced KYC solutions use multi-layered authentication methods to detect fraudulent applications before they’re approved. Adopt real-time fraud prevention solutions – Businesses should invest in fraud prevention solutions that analyze transaction patterns and device intelligence to flag suspicious activity. Strengthen synthetic identity fraud detection – Detecting synthetic identities requires a combination of behavioral analytics, document verification and cross-industry data matching. Advanced synthetic fraud detection tools can help businesses identify and block synthetic identities. Stay ahead of AI fraudsters AI-generated fake IDs and synthetic identities are evolving, but businesses don’t have to be caught off guard. By investing in identity solutions that leverage AI-driven fraud detection, businesses can protect themselves from costly fraud schemes while ensuring a seamless experience for legitimate customers. At Experian, we combine cutting-edge fraud prevention, KYC and authentication solutions to help businesses detect and prevent AI-generated fake ID and synthetic ID fraud before they cause damage. Our advanced analytics, machine learning models and real-time data insights provide the intelligence businesses need to outsmart fraudsters. Learn more *This article includes content created by an AI language model and is intended to provide general information. 1 https://www.404media.co/inside-the-underground-site-where-ai-neural-networks-churns-out-fake-ids-onlyfake/

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