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You are reading: 5 Ways to Spot Document Fraud

April 22, 2024

5 Ways to Spot Document Fraud

Daniel Berlind

Have you ever come across the term ‘document fraud’ and wondered what it means? Document fraud happens when someone changes, forges, or misuses documents to trick others. It can take many forms, from counterfeit bank statements to fake signatures. It sounds like something out of a spy movie, right? But here’s the kicker – it happens more often than you’d think.

With the rise in technology, document fraud has become increasingly sophisticated, making it harder to detect with the naked eye. Knowing what to look for can be the difference between falling victim to a scam and running a secure, trustworthy operation. Spotting it is crucial to save you from potential headaches and protect your hard-earned money and personal information.

Are you ready to become a document fraud detective? Let’s get started!

Why Fraud Detection is Important

It’s no secret that fraud is rampant throughout the US. Whether it’s credit card, identity, or rental application fraud, someone you know has likely been a victim of at least one. Easy access to technology has made committing fraud easier than ever, and it’s becoming increasingly sophisticated, making it harder to detect with the naked eye.

First, let’s review the difference between fraud detection and fraud prevention. Fraud detection is the act of catching fraud – either with technology or by checking it with the human eye.

Fraud prevention is the proactive measure of preventing fraud from happening in the first place. Fraud prevention methods include employee education, regular audits, and authentication processes.

Some methods serve as both fraud prevention and detection. By double-checking a person’s identification (ID) or having a thorough tenant screening process, you’re not only helping to prevent fraudulent activity but also serving as a way to catch any attempts at fraud.

Fraud Fast Stats 

  • In 2021, the Federal Trade Commission (FTC) received 5.7 million total fraud reports, 1.4 million of which were identity theft cases
  • The median loss of fraud cases for victims is about $500
  • 65% of credit card holders have been fraud victims at some point in their lives
  • 1 in 8 rental (12%) applications contains some type of fraud
  • A rental property applicant with a fake document is 7x more likely to end in eviction*, or incur any bad debt

Read our article on current fraud trends for more statistics.

1. Check for Inconsistencies

Inconsistencies in fonts, sizes, or colors can be a clear giveaway of document fraud. For example, if a document contains multiple font types or the alignment seems off, it could indicate that a fraudster has tampered with the original copy.

Documents altered to change the date can also be a sign of fraud. Scammers may make changes here to make it look like they are receiving money on a regular schedule when they actually aren’t, or they may do it to make deadlines.

2. Look for Errors and Alterations

Any signs of erasures, alterations, or overwriting may indicate fraudulent activity. This includes inconsistent handwriting, use of correction fluid, or smudges.

You should also keep an eye out for minor errors, such as spelling mistakes or inconsistent grammar. Fraudsters are relying on you speeding through the document and missing such mistakes. Slow down and read each sentence carefully to avoid this pitfall.

3. Verify Signatures

Did you know that a forged signature is one of the most common types of document fraud? When you’re reviewing a document, always keep an eye out for the signature style and consistency. If it seems different from the real deal or looks shaky and hesitant, there’s a good chance it’s not legit.

4. Examine Paper Quality and Watermarks

For documents received in person, there are additional things you should be aware of. Counterfeit documents may be printed on lower-quality paper or have missing or poor-quality watermarks. Hold the document to a light to check for a watermark and closely examine the paper’s texture. If it looks suspicious, it’s likely a fake.

5. Use Technology

While knowing what to look for when examining documents is essential, the human eye simply can’t catch everything. Technology has only improved over the years, making it easier for fraudsters to find new, imperceptible ways of altering their documents.

The upside is that fraud detection technology has dramatically improved, too! Investing in technology that can help detect document fraud is one of the best things you can do for your business. UV lights can reveal hidden security features on official paper documents, while software solutions can analyze signatures, verify identity, and check for any digital alterations.

At Snappt, we detect fake bank statements and pay stubs submitted to property managers. Our AI-enabled fraud detection software is designed to deter fraudulent activity so property owners and managers can rest easily. We catch 99.8% of edited documents, an unmatched accuracy rate in the industry. Think we can help you? Schedule a free demo today! 

To Sum Up…

Fraud detection is crucial for every business owner. It protects your company’s reputation, finances, and overall integrity. While the methods fraudsters use may be growing more advanced, so are the tools and techniques available to combat them. By staying vigilant and investing in preventative measures, you can ensure your business remains secure and trustworthy.

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