If you search for “genuine employment certificate in India”, you can see how easy it is to find an agency to give you fake certificates. A few years ago, fraudsters were using photoshop and graphic design tools to generate fake certificates. But times have changed.
Fraud methods have become more sophisticated. A fake certificate works if there are no employee background checks. You may think that if you check with the source – a fake certificate could get busted instantly. However, what can employers do if the certificate is from a valid company with a positive verification? Traditional BGV just won’t work.
A recent Round Table session hosted by People Matters and IDfy addressed the critical issue of modern employee frauds. 15 HR leaders got together to get to the bottom of an increasing sophistication and frequency of fraud by job applicants.
Harini Sreenivasan, Partner at Semcostyle Institute of India, and Paritosh Desai, CPO at IDfy moderated a highly engaging discussion. The participants shared their own experiences and challenges.
The Scale and Sophistication of Employee Fraud
The session opened with a revealing study conducted by IDfy. Over the past few years, IDfy has collated a list of more than 1,000 fake companies that have been found on various employment documents. What is interesting about these companies is that they all have legitimate-looking websites, genuine email addresses, real physical addresses, and even official MCA registrations.
However, these companies are in-fact shell companies that are being used to deliver fake certificates
IDfy’s in-house Fraud Investigation Team conducts a deeper analysis on employer certificates. For these 1000+ companies, the team found conclusive indicators based on MCA records, EPFO records and GST details. The analysis revealed that these companies had no revenue and were not submitting statutory financial records. This finding raises significant concerns about the extent to which agencies are using impersonation or collusion techniques to deliver seemingly-genuine certificates to job seekers.
The use of AI and Smart Checks
To combat these sophisticated fraud risks, speakers at the session advocated for a combination of AI and Smart Checks
The role of BGV companies has changed now. They need to employ a far wider and deeper diligence in their processes. This is only possible with AI and Smart Checks.
Advanced checks such as Bank Statement Analysis can throw anomalies and patterns which help filter out bad actors from the systems. Bank statements are sometimes called ‘Character Certificates’ – They can reveal risk Hidden debts, fiscal indiscipline, gambling patterns, unexplained income etc.
Advanced checks for employment from lesser-known-companies should include a deep diligence on the financial history
Advanced checks in legal-history provide details on any existing or prior litigation related risk – more importantly, they reveal any prior criminal background.
Ensuring Trust and Compliance on Data Privacy and Consent
A critical component of a secure and trustworthy hiring process is the explicit consent and proper collection of candidate information. Transparent communication regarding how candidate data will be used, stored, and shared is essential.
Robust consent management systems and stringent data security measures help maintain candidate trust and ensure compliance with legal regulations. The speakers emphasised that evolving these processes to keep pace with sophisticated threats is crucial.
The session highlighted that by integrating these technologies and practices, organisations can better protect themselves against fraud and build a more trustworthy and efficient hiring process.
Building a Resilient and Fraud-Free Hiring Process
In conclusion, the RoundTable session underscored the urgent need for organisations to adopt innovative and comprehensive HR strategies to combat the growing threat of employee fraud.
The increasing sophistication of fraudulent activities, from fake documents to deep fakes and impersonations, necessitates the integration of advanced technologies like AI and machine learning in the verification process.
By leveraging AI, Smart Checks, and robust data security practices, companies can enhance the rigour of their hiring processes and maintain compliance with legal regulations.
Ensuring explicit consent and transparent communication with candidates is crucial for building trust. As demonstrated by the insights and solutions shared by industry experts, a proactive and technologically advanced approach is essential for safeguarding organisational integrity and fostering a resilient, fraud-free hiring environment.Watch here to uncover the truth behind background verification fraud and protect your organization from potential risks.