The year 2022 witnessed significant changes in the way we work, as companies adjusted to evolving trends and technological advancements. Remote work, commonly known as Work-from-Home (WFH), has become widely accepted and embraced in various industries. Some companies have even adopted a permanent WFH model, recognizing its benefits and the changing preferences of employees.
While many organizations have opted for a hybrid model, where employees are encouraged to WFH most of the time and visit the office when necessary, the use of video interviews has become the norm. It has become so prevalent that candidates are often taken aback when invited for an in-person interview. In this new era, it is not uncommon for individuals to work for months without ever meeting their colleagues face-to-face. In fact, candidates now actively seek out companies that have a formal WFH policy, considering it a desirable perk.
However, as with any sudden shift in behavior and practices, there are individuals who attempt to exploit loopholes for personal gain. Our data indicate that in 2022, employment fraud saw a significant increase of 30%. These fraudulent activities are often a direct result of gaps in remote hiring, onboarding, and work processes, which dishonest candidates have capitalized on for short-term benefits. As remote work and digital interactions continue to be an integral part of our work culture, organizations must adapt and enhance their background check processes to prevent these emerging frauds.
1. Dual employment fraud
The origin
If there’s one thing we have learned from 2021, it is that ‘double-timing’ is not restricted to romantic relationships anymore. With employees not required to show up in the office every day, Smart Alecs are taking up two jobs at the same time and somehow managing to keep them too. Dual employment fraud has certain distinct traits. One, this is more likely to be committed by someone below 30 years of age. Two, this has a higher incidence in technology jobs like software development and support.
Worrying factors
It’s important for companies to prevent dual employment fraud Conflict of interest Your employee could actually be working for your competitor too. Commitment issues You cannot expect loyalty, honesty, and commitment from a person who is holding another job on top of yours. Susceptibility to fraud There’s a higher chance of data breaches and theft of company assets by an employee with lower commitment levels.
Solution
EPF Check Checking a person’s Provident Fund data can help companies detect someone on their rolls holding dual employment. IDfy has an API that does instant check on EPF accounts
2. Impersonation fraud
The origin
Yes, video interviews are convenient and efficient. But these advantages come with a long list of limitations that dishonest people have exploited to their advantage. While a majority of these have been candidates cheating during the interview – by using a Bluetooth device to get prompted and Googling answers on the side – we have seen a disturbing trend of impersonation fraud emerging out of video interviews.
Companies have discovered, often far too late, that the person joining the organization is different from the one who attended the interview. Typically, this type of fraud is seen in large organizations where the interviewer is often different from the reporting manager. This is also more common in organisations with offices spread across the country with people joining in different cities at any point in time.
Worrying factors
Generally, an organization wakes up to an incidence of this fraud when they realize a person is showing none of the skills required to perform on their job. When they dig deeper they realize that the person was rated highly on the same skills during the interview. Further digging deeper makes them realize that a totally different person may have been onboarded from the one that was interviewed.
On many occasions, the organization has no way to prove the fraud as the video interview was not recorded. There is just a very strong hunch of this is the case. In almost every such case, this is caught months after the person has joined. During these months, the company has paid its salary while exposing its data and assets to an impersonator. This type of fraud is a matter of grave concern.
Solution
You can prevent this fraud through a few small steps. At the start of the video interview, you can ask the candidate to show their ID card on video. IDfy’s API will do a screen capture of the ID card. IDfy’s API would also take a picture of the candidate being interviewed. IDfy’s OCR API will extract the information from the ID card and compare it with the application form to ensure that they match.
IDfy’s FaceMatch API will compare the picture of the candidate with the picture of the ID card to ensure they are of the same person. With this, you can ensure that the person attending the interview is the one who applied for the job. When the person joins the company, IDfy’s FaceMatch API will compare their picture with the picture of the candidate at the interview. With this, you can make sure that the person joining your company is the same as the one who attended the interview.
3. Absconding with company assets
The origin
With people joining their new jobs remotely, companies are sending assets to their homes. During these times, the person might continue working in the company without ever visiting their offices or meeting co-workers.
Companies have reported that sometimes such a person simply vanishes into thin air. Emails go unanswered. The phone remains switched off. The home address appears locked.
Along with the person, what also vanishes are the assets that were sent by the company. Laptops and cell phones are the most common casualties.
Worrying factors
It’s important for companies to prevent dual employment fraud
Data theft
A person who steals company assets is most likely to also steal company data and trade secrets.
Loss of trust and faith
One such case makes life difficult for the 99% of others who are honest and have no such ill intentions. Companies find it difficult to entrust their faith in people causing inconvenience and negative energy for everyone involved.
Loss of corporate assets
The financial loss of these assets can multiply if this becomes a more common phenomenon.
Solution
EPF Check
Criminal record check – Most people committing this type of fraud are repeat offenders. A criminal records check that combines court records and police records is a must to prevent this fraud. However, this comes with limitations. Most police checks are done with the local police station only. This type of fraudster typically moves homes regularly, often in areas far away from each other. The local police station check may not prove conclusive.
Recognizing Employment Fraud
Recognizing employment fraud early is crucial to avoid falling victim to deceitful schemes. This section provides comprehensive insights into identifying fraudulent employment opportunities and discerning between genuine offers and scams.
Red Flags and Warning Signs
- Introduction to Red Flags:
- Definition and importance of recognizing red flags in employment opportunities.
- Explanation of how red flags can help in avoiding potential scams.
- Common Red Flags:
- Unprofessional communication: Spelling mistakes, grammatical errors, and informal language in official communications.
- Requests for payment: Any requirement for payment or purchase of equipment upfront.
- Too good to be true: Unrealistically high salary offers or benefits for seemingly simple tasks or no experience.
- Lack of clear job details: Vague job descriptions and responsibilities.
- Rushed processes: Pressure to make decisions quickly or sign contracts immediately.
- Importance of Attention to Detail:
- Delving into the significance of scrutinizing job offers and advertisements.
- Tips on what details to focus on and how to assess their legitimacy.
- Role of Intuition and Skepticism:
- Discussion on the importance of trusting one’s instincts when something feels off.
- Encouragement to validate and verify before proceeding with any commitment.
Online Presence and Verification
- Importance of Online Verification:
- Explanation of why verifying company details online is crucial in today’s digital age.
- Overview of the risks associated with not conducting online verification.
- Methods for Online Verification:
- Utilizing search engines to find information about the company.
- Checking official websites and cross-referencing contact details.
- Verifying the company’s existence through business registries or licensing bodies.
- Role of Online Reviews and Testimonials:
- Significance of reviews and testimonials in assessing a company’s reputation.
- Strategies for distinguishing between genuine and fake reviews.
- Importance of considering multiple sources of reviews and feedback.
Protection and Reporting
Empowering oneself with protection strategies and knowing how to report fraudulent activities is fundamental in the fight against employment fraud. This section delves into safeguarding personal information and the importance and procedure of reporting employment fraud.
Protecting Personal Information
- Importance of Safeguarding Information:
- Elaboration on the significance of protecting personal and financial information.
- Overview of the potential risks and repercussions of information breaches.
- Best Practices for Sharing Information:
- Guidelines on what information should and should not be shared during job applications.
- Recommendations on how to securely share sensitive information when necessary.
- Creating Strong Passwords and Enabling Two-Factor Authentication:
- Practical advice on creating robust and unique passwords.
- Steps on enabling two-factor authentication for added security on online platforms.
Reporting Instances of Employment Fraud
- Importance of Reporting Fraud:
- Insight into why reporting fraudulent activities is crucial for individual protection and broader prevention efforts.
- Explanation of the role of reporting in bringing fraudsters to justice.
- Steps to Take When Encountering Employment Fraud:
- Detailed guidelines on immediate actions to take upon suspecting or identifying employment fraud.
- Information on preserving evidence and documenting fraudulent activities.
- Role of Law Enforcement and Regulatory Agencies:
- Overview of the responsibilities of law enforcement and other agencies in addressing employment fraud.
- Information on how these agencies investigate and act upon reports of employment fraud.
Legal Recourse and Support
Understanding the available legal recourse and accessing support are essential components in overcoming the aftermath of employment fraud. This section focuses on elucidating the legal rights of victims, the available support structures, and tips on recovery.
Legal Rights of Victims
- Overview of Legal Rights:
- Detailed explanation of the rights afforded to victims of employment fraud.
- Information on the legal provisions available to seek restitution and compensation.
- Navigating Legal Processes:
- Step-by-step guide on initiating legal actions against perpetrators.
- Insights into the legal documentation, evidentiary requirements, and the court process.
- Seeking Legal Counsel:
- Importance of obtaining legal advice in employment fraud cases.
- Tips on finding and choosing the right legal counsel for employment fraud cases.
Support and Resources for Victims
- Available Support Organizations:
- Comprehensive list of organizations and agencies offering support to victims of employment fraud.
- Information on the services provided by these organizations, including counseling and legal aid.
- Counseling and Support Groups:
- Discussion on the significance of psychological support for victims.
- Information on how to find and join support groups and counseling services.
- Recovery Path and Coping Mechanisms:
- Suggestions on how to overcome the emotional and financial impact of employment fraud.
- Strategies for rebuilding trust and confidence post victimization.
Impact of Employment Fraud
Understanding the multifaceted impact of employment fraud is crucial to comprehend the magnitude of its repercussions. This section provides an in-depth analysis of the economic, psychological, and corporate implications of employment fraud.
Economic Impact
- Assessment of Economic Repercussions:
- In-depth analysis of the financial losses incurred by individuals and the overall economy due to employment fraud.
- Examination of lost potential economic growth and opportunities stemming from widespread fraud.
- Macro and Micro Economic Perspectives:
- Exploration of the macroeconomic consequences, including impacts on national economies and international trade.
- Investigation of the microeconomic effects, focusing on individual financial wellbeing and community economic health.
Psychological and Emotional Impact
- Mental Health Implications:
- Exploration of the psychological distress and mental health disorders that can arise from being a victim of employment fraud.
- Discussion on the long-term effects of such distress and the importance of seeking help.
- Building Resilience:
- Strategies for developing emotional resilience and coping with the aftermath of fraud.
- Recommendations for mental health support and professional counseling services.
Impact on Genuine Employers
- Trust and Reputation:
- Analysis of how employment fraud affects the credibility and trustworthiness of legitimate employers.
- Exploration of the strategies that genuine employers can implement to rebuild trust with prospective employees.
- Recruitment Challenges:
- Discussion on the difficulties faced by legitimate employers in attracting talent due to prevalent employment fraud.
- Insights into enhancing recruitment processes to assure candidates of legitimacy and transparency.
Prevention Strategies
Preventing employment fraud is a collective responsibility requiring awareness, vigilance, and proactive measures. This section will delve into comprehensive prevention strategies, exploring education, verification processes, and technological solutions.
Education and Awareness
- Promoting Awareness:
- Explanation of the crucial role of public awareness campaigns in preventing employment fraud.
- Overview of the different platforms and mediums suitable for disseminating information about employment fraud.
- Knowledge Enhancement:
- Encouragement for individuals to continuously educate themselves on the evolving tactics of fraudsters.
- Suggestions on reliable sources for obtaining information on emerging employment fraud trends.
- Community Engagement:
- Importance of community discussions and workshops in raising awareness about employment fraud.
- Tips on organizing and participating in community engagement initiatives related to fraud prevention.
Enhanced Verification Processes
- Advanced Verification Methods:
- Exploration of innovative verification methods for authenticating job offers and employers.
- Overview of the role of background checks and due diligence in authenticating employment opportunities.
- Employee-Employer Verification:
- Importance of mutual verification between employees and employers to ensure legitimacy.
- Practical steps for employers and prospective employees to verify each other’s credibility.
Technological Solutions
- Emerging Technologies:
- Discussion on the potential of AI, blockchain, and other emerging technologies in detecting and preventing employment fraud.
- Insights into how technology can enhance verification processes and reduce the risk of fraud.
- Adoption and Implementation:
- Encouragement for individuals and companies to adopt technology-based solutions for fraud prevention.
- Guidelines on the implementation of technological tools and solutions for detecting and avoiding employment fraud.
The Role of Government and Regulatory Bodies
Governments and regulatory bodies play a pivotal role in establishing frameworks and enforcing laws to combat employment fraud. This section outlines their role, the legislation in place, and the enforcement mechanisms to deal with employment fraud.
Legislation Against Employment Fraud
- Existing Legal Frameworks:
- Detailed examination of laws and regulations addressing employment fraud across different jurisdictions.
- Analysis of the effectiveness and gaps in current legal frameworks in combating employment fraud.
- Policy Development:
- Discussion on the need for evolving policies to address the changing landscape of employment fraud.
- Insights into policy considerations and development processes to strengthen legislative measures against employment fraud.
Enforcement and Penalties
- Law Enforcement Strategies:
- Exploration of the strategies and mechanisms employed by law enforcement agencies to investigate and combat employment fraud.
- Overview of the challenges and opportunities in enforcing laws against employment fraud.
- Penalties and Deterrence:
- Description of the various penalties imposed on perpetrators of employment fraud.
- Discussion on the role of penalties in deterring potential fraudsters and protecting prospective employees.
Initiatives and Programs
- Government-Led Initiatives:
- Overview of various government initiatives and programs aimed at raising awareness and preventing employment fraud.
- Evaluation of the effectiveness and impact of such initiatives in curbing employment fraud.
- International Collaboration:
- Insights into the efforts of international collaborations and agreements in addressing cross-border employment fraud.
- Exploration of the potential enhancements in international cooperation to combat employment fraud effectively.
The Future of Employment and Fraud Prevention
Examining future trends and anticipating the evolution of employment fraud are crucial for developing effective prevention strategies. This section will discuss the emerging trends, innovative solutions, and the importance of international cooperation in combating employment fraud.
Emerging Trends in Employment Fraud
- Forecasting Fraud Tactics:
- Analysis of the likely evolution of employment fraud tactics based on current trends and technological advancements.
- Overview of the potential industries and sectors that might be targeted by fraudsters in the future.
- Proactive Adaptation:
- Emphasis on the need for individuals, employers, and authorities to adapt proactively to emerging trends in employment fraud.
- Recommendations for staying informed and prepared to counteract evolving fraudulent schemes.
Innovative Solutions and Developments
- Technological Innovations:
- Exploration of the forthcoming technological developments in fraud detection and prevention.
- Discussion on the integration and implementation of innovative solutions to stay ahead of fraudsters.
- Research and Development:
- Insights into ongoing research and developments in the field of fraud prevention.
- Overview of the potential breakthroughs and advancements in fraud detection methodologies.
Strengthening International Cooperation
- Global Alliances:
- Examination of the existing international alliances and frameworks aimed at addressing employment fraud.
- Discussion on enhancing international cooperation and coordination to combat cross-border employment fraud effectively.
- Unified Legal Frameworks:
- Insights into the development of unified international legal frameworks to address employment fraud.
- Exploration of the potential benefits and challenges of establishing global legal standards against employment fraud.
The Role of IDfy in Mitigating Employment Fraud
IDfy, as a leading entity in identity verification and fraud detection solutions, plays a pivotal role in combating employment fraud. Here’s a breakdown of how it contributes to creating a safer and more transparent employment landscape:
- Robust Verification Solutions:
- IDfy provides comprehensive background verification solutions that enable employers to validate the credentials and identities of prospective employees meticulously, ensuring that only genuine candidates are considered.
- By leveraging advanced technologies, IDfy automates the verification process, making it quicker, more accurate, and efficient, thus mitigating the risks associated with hiring decisions.
- Innovative Fraud Detection:
- IDfy employs cutting-edge technologies like Artificial Intelligence and Machine Learning to detect anomalies and potential fraudulent activities in real-time.
- The innovative approaches adopted by IDfy allow for the identification of sophisticated fraud schemes, ensuring enhanced protection against evolving employment fraud tactics.
- Enhanced Due Diligence:
- IDfy’s platforms facilitate enhanced due diligence by offering in-depth checks and screenings, uncovering any red flags or discrepancies in the information provided by job applicants.
- This thorough scrutiny acts as a strong deterrent to individuals with malicious intents, safeguarding organizations from potential legal and reputational damages.
- Educational Initiatives and Awareness:
- IDfy contributes to raising awareness about employment fraud through educational initiatives, workshops, and knowledge-sharing sessions.
- These initiatives empower individuals and organizations with the knowledge and tools required to recognize and avoid falling prey to employment fraud schemes.
- Compliance and Regulatory Adherence:
- IDfy ensures that its services are in compliance with applicable laws and regulations, reinforcing the legal frameworks established to combat employment fraud.
- By adhering to regulatory standards, IDfy fortifies the trust and reliability placed in its services, promoting lawful and ethical hiring practices.
- International Collaboration:
- IDfy actively engages in collaborations with international entities, sharing insights, and developing unified strategies to combat cross-border employment fraud.
- These collaborations enhance the global efforts in addressing employment fraud, fostering a secure and transparent international employment environment.
