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Recent advances in the quality and availability of realistic-looking fake IDs expose financial institutions of all sizes to potential fraud losses and compliance issues. With more than 1,100 different valid state driver license formats in circulation in the United States, how can any one person be expected to recognize and determine the authenticity of an ID presented at the transaction window?
Several recently discovered off-shore websites have made it possible to purchase a nearly-perfect replica of a U.S. driver’s license. Someone who wants to steal an identity, is willing to pay $150, and will send a picture of themselves to the website operators can receive a driver’s license containing any personal information within two weeks. So, fraudsters can take fundamental personal identity data, such as name, address, date of birth, etc., and create a nearly indiscernible replica of a real-person’s ID document, but with the criminal’s picture on it.
This new breed of counterfeit ID document contains magnetic strip or barcode information that can be scanned and read by POS equipment designed to use that data as a means of conducting limited verification of the document. In addition, many of the sophisticated visible features used to secure driver licenses, such as Optical Variable Images (OVI), holograms, and even UV fluorescent security features are expertly copied into these counterfeits.
Standard current best practices used by the financial industry for identity validation, such as verifying identity against databases like Lexis-Nexis or Veritad, would be futile because the ID they will be looking to verify will contain the actual name and information for a real person.
Sophisticated identity thieves expose credit unions and other financial service organizations to potential fraud losses caused when the criminals are able to gain access to customer accounts. Criminals armed with a nearly perfect ID document can create fraudulent credit applications, make withdrawals from bank accounts, obtain ATM cards, and access safe deposit boxes.
In addition, these new counterfeit IDs increase the complexity and difficulty of complying with BSA, Red Flag, Know Your Customer, and other federal, state, and local anti-money-laundering and fraud-prevention legislation.
The involvement of organized crime adds a disturbing twist to this renewed attack on financial institutions. The addition of international criminal professionals into the ID theft arena has increased the jeopardy for financial institutions. Through online dark markets organized rings buy and sell personal identity information, ranging from basic data to sensitive information such as driver license number, social security number, credit card account numbers, previous address information, etc.
Some products used by government agencies for border control and immigration purposes can catch these well-made fakes. Advanced image capture and authentication equipment can take high-resolution images of driver’s licenses and other forms of identification to perform high-confidence authentication.
Fraud Fighter offers two such products: the B5000 and the ID-150. These are quick and inexpensive tools for driver license authentication and can help credit unions comply with Know Your Customer regulations, Bank Secrecy Act (BSA) requirements and other Red Flag Rules. To protect your credit union, make sure you are ahead of the curve when it comes to fraud detection.
Join UVeritech for a free webinar, “Hi-Tech Counterfeit ID's and the Hi-Tech Countermeasures required to detect them,” that addresses current and emerging threats including High-Tech Counterfeit ID’s. You will see some of the new “advanced” counterfeit ID’s, and can watch a live demo of the equipment that can detect fake documents. UVeritech will also discuss why “ID Document Authentication” is the key to unraveling the sophisticated schemes of the professional criminal ID theft ring.
UVeritech, manufacturer of FraudFighter Products established in 2000, is a leader in multi-layered fraud prevention and counterfeit money detection solutions. UVeritech pioneered the use of POS counterfeit fraud detection scanners in enterprise accounts such as Wells Fargo, Bank of America, JPMC, Bank One, Regions, Compass, Citizens, PNC, and over 1000 credit unions. UVeritech is also a leader in government, hospitality, rental and the retail industries. For more information, call: 800-883-8822.
December 5, 2011
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