Onfido 2022 Identity Fraud Report: Surge in Sophisticated Fraud in the Netherlands Points to Increase in Organized Crime Rings

·5 min read

Sophisticated fraud increased 72% over previous year in the Netherlands
Professional services is the industry most affected by ID fraud
INTERPOL contributes to benchmark report; links ID fraud to "organized crime, money laundering and terrorism"

AMSTERDAM, December 08, 2021--(BUSINESS WIRE)--Onfido, the global identity verification and authentication provider, today published its 2022 Identity Fraud Report, which reveals a new wave of organized fraud activity entering the marketplace.

Over the past 12 months, 50% of all identity document (ID) fraud in the Netherlands was classed as ‘medium’ sophisticated fraud, which is a 72% increase over the previous year. Less apparent errors, such as visibly incorrect fonts, imitated security features, or the wrong photo printing technique, suggest an increase in fraud rings. These organized groups will attempt to create ‘verified’ accounts with fake documents before using them to embark on other types of fraud. The return on this type of attack is greater than taking advantage of other types, such as taking advantage of sign-up bonuses.

ID fraud rate reaches pre-pandemic levels in the Netherlands

As consumers feel increasingly secure in online transactions, fraudsters appear to continue to rely on their online activity, as globally, identity document fraud has not yet returned to pre-pandemic levels. In 2020, there was a 41 percent increase in ID fraud, with the average ID fraud rate reaching 5.8 percent. Over the past 12 months, the average fraud rate has remained high at 5.9 percent, even though some physical restrictions began to lift. So fraud activity still has not returned to pre-pandemic levels.

However, in the Netherlands, the average fraud rate dropped to pre-pandemic levels, standing at 3.3 percent, according to the Identity Fraud Report 2022. This could mean that amateurs who moved into the space as fraudsters during the lockdowns and economic hard times are returning to work. Fraudsters are still going after high stake industries, as the most attacked industries in the Netherlands in order are Professional Services, Gaming and Transportation.

"Large-scale operations often undertaken by criminal fraud rings have the resources to conduct sophisticated fraud such as deepfakes, 2D and 3D masks. They might also resort to techniques like coercion. Businesses will see fewer of these types of attacks, but they are the ones that can cause the most damage in the shortest space of time," said Michael Van Gestel, Head of Global Document Fraud at Onfido. "By incorporating biometric authentication and other sophisticated identity verification methods, businesses can ensure that no matter how fraudsters try to capitalize on the changing situation, they can significantly lower the risk of fraud to their organization and customers."

Onfido partners with international criminal police organization, INTERPOL, on fraud techniques and learnings. The agency contributed to the report noting, "Fraudulent documents open up avenues for serious organized crime, including money laundering and terrorist financing. Consequently, failure to identify fraudulent documents in both real-world and online scenarios poses a threat to the global economy, countries, and their citizens. Increasingly, we have to adapt to the digital use of identity documents, as well as physical. Businesses and governments alike are facing challenges when identifying fraud in this environment."

The third edition of Onfido’s annual Identity Fraud Report also revealed:

  • Passports became the most frequently attacked ID: Over the past year, passports have overtaken National Identity Cards as the most frequently attacked form of identification. This points to a shift in fraudsters’ methods as they choose to target the one-sided passport page, rather than a two-sided ID card, and target the most high-assurance document in the hope that a passport’s reputation will help the fake go undetected.

  • Fraudsters have ditched the 9-5: Fraudsters have officially ditched the standard working week, as weekend attacks have increased by over 50% since 2019, making fraud much more difficult to predict. It could be because amateurs have moved into the space as part-time fraudsters, or that they’re taking advantage of businesses’ downtime when there are fewer employees to pick up on suspicious activity.

  • Biometrics is an effective fraud deterrent: Far fewer fraudsters attempted to overcome a biometric verification check than a document check. The average document fraud rate for 2021 was 5.9%, compared to 1.53% for selfies and 0.17% for videos.

"Biometric verification provides more protection against fraud than document verification alone —and a video selfie check provides superior protection over a photo selfie check," said Sarah Munro, Director of Biometrics. "The video user experience in itself acts as a natural deterrent against fraud because it’s a highly randomized active experience. Given that video spoofs accounted for a fraction of all our video checks, this makes it an excellent security measure for businesses focused on making fraud prevention a priority."

Methodology

The Onfido team of document fraud specialists processes millions of identity documents every year, helping over 800 clients detect fraud across 2,500 document types from 195 countries. The 2022 Identity Fraud Report shares the insights gained on the state of remote identity fraud over the past year, based on analysis of data collected from October 1, 2020 to October 1, 2021 and normalized by client and industry distribution.

Request a demo of Onfido’s award-winning identity verification technology.

About Onfido

Onfido is setting the new standard for digital access. The company digitally proves a user’s real identity using AI, by verifying a photo ID and comparing it to the person’s facial biometrics. This means that businesses no longer need to compromise on customer experience, conversion, privacy or security. That’s how Onfido gives companies the assurance they need to onboard customers remotely and securely.

Recognized as a global leader in AI for identity verification and authentication, Onfido is backed by TPG Growth, Idinvest Partners, Crane Venture Partners, Salesforce Ventures, M12 - Microsoft’s venture fund, and others. Onfido has raised $200m in funding, and with over 550 team members across eight countries, is enabling digital access for some of the largest companies around the world.

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View source version on businesswire.com: https://www.businesswire.com/news/home/20211208005103/en/

Contacts

Laura Noye, Onfido
press@onfido.com

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