Financial Crime World

Brazil’s Online Identity Theft Threat: A Growing Concern for Payments, Investment, and More

Brazil is experiencing a surge in online identity fraud, posing a significant threat to various industries, particularly payments, investment, trading, gambling, and crypto. Sumsub, a cybersecurity firm, recently conducted a study based on over 4.3 million verification procedures in Brazil, revealing concerning findings.

Key Insights from the Research

  • 88% of forged IDs in Brazil are printouts.
  • 80% of all identity fraud attempts occur during the verification process.
  • 80% of identity fraud attempts are synthetic.

Synthetic Identity Fraud: A Major Concern

Synthetic identity fraud is a serious issue in Brazil, as the country lacks advancements in technologies like Machine-Readable Zones (MRZs) in most documents. This makes Brazil an attractive target for such activities, with 80% of attempted identity fraud in the country being synthetic.

Impact of Identity Fraud on Brazilian Industries

Identity fraud in Brazil has significant implications for various industries, as Brazil’s digital economy continues to grow. According to Serasa Experian, the telecom sector experiences the most identity fraud cases (35.5%).

Common Types of Identity Fraud in Brazil

  1. Synthetic Fraud: Involves combining real and fake information to create new identities.
  2. Data Theft: Personal data obtained from fake websites or phishing scams.
  3. Counterfeit bills/bank slips fraud: Tricking victims into downloading fake bills to steal personal information.
  4. Self-fraud or friendly fraud: Unauthorized use of someone else’s credit card or one’s own credit card.
  5. Financing with forged documents: Using falsified documents for financial benefits, like purchasing real estate or opening shell companies.

Statistics on Identity Fraud in Brazil

The Sumsub analytics team analyzed over 50,000 fraud attempts and found that the most common type of identity fraud in Brazil occurs at the ID verification stage (80%).

  1. ID Verification Stage: 80% of identity fraud attempts occur at this stage.
  2. Proof of Address (POA) Verification: 15% of fraud attempts.
  3. Liveness and Selfie Check Deception: 5% of fraud attempts.

Combating Identity Fraud in Brazil

Tackling identity fraud in Brazil requires a multifaceted approach. At the ID verification stage, companies should look for red flags like:

  1. Printed IDs.
  2. Poor quality images.
  3. Inconsistencies between submitted document and user data.

Beyond ID verification, implementing additional measures can help prevent identity fraud. These include:

  1. Cross-checking users through local databases.
  2. Monitoring for abnormal behaviors.
  3. Comparing submitted documents against known fraudulent ones.

Employing biometric technology for face identification is also an essential step in ensuring an applicant’s physical presence and document ownership. With the ever-evolving nature of identity fraud, implementing robust security measures is crucial for businesses to protect themselves and their consumers.