ID check to fight fraud!

Category: Identity

Fraud involving identification documents, commonly known as ID fraud, affects a growing number of individuals and organizations around the world. Worse, the interconnected nature of today’s world has turned the problem into a truly global menace. Losses suffered as a result of ID fraud run into billions of dollars each year. In the U.S. alone, the annual financial losses caused by ID fraud in the corporate sector amount to tens of billions of dollars.1 Even though the financial industry is now in a much better position to tackle ID fraud than it was only a decade or so ago, fraudsters and counterfeiters are notoriously inventive, and incredibly difficult to beat. One of the areas where progress has been particularly strong is the heightening of awareness creation, as a result of which a growing number of people now understand just how important it is to protect their identity.

Given the far-reaching consequences of ID fraud in terms of both financial and reputational loss, client identification has very much been in the spotlight in recent years. Banks in particular have introduced extensive measures to reinforce their client identification processes, and in doing so, have protected themselves and their clients from ID fraud.

Financial institutions now perform an ID check before accepting new clients. This process includes the verification of a client’s identification document. Where such checks are not performed or conducted with insufficient diligence, the consequences can be dire—anything from money laundering to the contracting of loans or mortgages that will never be repaid.

By law, banks are required to verify the identity of every client with which they enter into a business relationship. The actual verification process is often embedded in the organization’s compliance risk management discipline. However, the challenge in the customer identification process lies in the ID check itself but what should you look for when performing an ID check? Learn more about the basics of ID document verification and check out our “10 tips when checking ID documents” article.

1-Bureau of Justice Statistics, National Crime Victimization Survey, Identity Theft Supplement, 2012 and 2014. Identity fraud in the U.S. was estimated to be responsible for financial losses of $24.7 billion in 2012 and $15.4 billion by the U.S. DOJ.

 This article was published in ACAMS Today, December 2015 – February 2016, Vol. 15 No. 1. Read the complete article on

Jacqueline van den Top