Safeguarding Your Business from Employment Fraud 

January 18, 2024 by Alex Lvoff

It is a New Year and a new start. How about a new job? That is what thousands of employees will consider over the next month. It is also a time for employers to attract new talents, but they must be aware of different types of employment fraud. The rise of remote work has significantly increased the prevalence of remote hiring practices, from the initial job application to the onboarding process and beyond. Unfortunately, this shift has also opened the door to a surge in imposter employees, also known as ‘candidate fraud,’ posing a significant concern for organizations. 

How does employment identity theft happen? 

Instances of potential job candidates utilizing real-time deepfake video and deepfake audio, along with personally identifiable information (PII), during remote interviews to secure positions within American companies have been on the rise. The Federal Bureau of Investigation (FBI) reports that fraudulent individuals often acquire PII through fake job opening posts, which enable them to gather candidate information and resumes. Surprisingly, the tools necessary for impersonation on live video calls do not require sophisticated or expensive hardware or software. 

Employment identity theft can occur in several ways. Here are a few examples: 

  1. Inaccurate credentials: Employers may inadvertently hire someone with false or stolen credentials if they fail to conduct comprehensive background checks. When the employer discovers the deception, it can be challenging to trace the true identity of the person they unknowingly hired. 
  2. Limited-term job offers: Some industries offer temporary job opportunities in distant locations. Individuals with criminal backgrounds may steal victims’ identities to apply for these jobs, hoping that their crimes will go unnoticed until after the job is complete. 
  3. Perpetrated by colleagues: In rare instances, jealous colleagues or coworkers can commit employment identity theft. They may steal a coworker’s information during a data breach and sell it on the dark web or use the victim’s credentials to frame them for fraudulent workplace actions. 

Preventing employment identity theft 

In addition to the reported cases of imposter employee fraud, it is crucial to acknowledge the potential for other scams that exploit new technologies and the prevalence of remote work. Malicious cyber attackers could secure employment using stolen credentials, enabling them to gain unauthorized access to sensitive data or company systems. A proficient hacker possessing the necessary IT skills may find it relatively easy to leverage social engineering techniques during the hiring process. 

Consequently, the reliability of traditional methods for employee verification, such as face-to-face interactions and personal recognition, is diminishing in the face of remote work and the technological advancements that enable individuals to manipulate their appearance, voice, and identity. 

To mitigate risks associated with hiring imposters, it is imperative to incorporate robust measures into the recruitment process. Here are some key considerations: 

  1. Establish clear policies and employment contracts: Clearly communicate your organization’s policies regarding moonlighting in employment contracts, employee handbooks, or other official documents.
  2. Confidentiality and non-compete agreements: Implement confidentiality and non-compete agreements to protect your company’s sensitive information and intellectual property.
  3. Monitoring: Automate employment and income verification of your employees. 
  4. Provide training on cybersecurity best practices: Educate employees about cyber-attacks and identity scams, such as phishing scams, through seminars and workplace training sessions.
  5. Implement robust security measures: Use firewalls, encrypt sensitive employee information, and limit access to personal data. Minimize the number of employees who have access to this information.
  6. Thoroughly screen new employees: Verify the accuracy of Social Security numbers and other information during the hiring process. Conduct comprehensive background checks, including checking bank account information and credit reports and fight against synthetic identities.
  7. Offer identity theft protection as a benefit: Consider providing identity theft protection services to your employees as part of their benefits package. These services can detect and alert victims of potential identity theft, facilitating a fast response. 

The new era of remote work necessitates a fresh perspective on the hiring process. It is crucial to reevaluate HR practices and leverage AI fraud detection technologies to ensure that the individuals you hire, and employ are who they claim to be, guarding against the infiltration of imposters. 

Navigating employment fraud with effective solutions 

Employment fraud presents significant risks and challenges for employers, including conflicts of interest, reputation damage, and breaches of confidentiality. By taking the right preventative measures, you can safeguard your organization and employees.  

Streamlining the hiring process is essential to remain competitive. But how do you balance the need for speed and ease of use with essential ID checks?  By combining the best data with our automated ID verification processes, Experian helps you protect your business and onboard new talents efficiently. Our best-in-class solutions employ device recognition, behavioral biometrics, machine learning and global fraud databases to spot and block suspicious activity before it becomes a problem. 

*This article includes content created by an AI language model and is intended to provide general information.

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