A report by a KYC/BGV vendor found that the most forged documents were Voter ID, PAN Cards and Aadhar, in that order. In India we already have a problem of plenty. Add to the further issue of multiplicity of Aadhar-PAN one-to-many combos. Once I remember when issuing a largish payment to a party, I had to ask for his PAN card. Unfortunately, I can’t credit him for his award-winning response. He said, “Which of my PAN cards did I give you the last time?”

Clearly, there are many checks we do in Fraud Verifications (such fraud though, is largely a lending product problem and doesn’t matter for deposit accounts.) These include –

• The identity matches the applicant’s
• The identity is not a synthetic
• The Documents are authentic, unaltered, matching, unexpired etc.
• The person is not a prior fraudster
• The face matches, aka the liveness check
• Income verification
• Bureau checks
• Employment Checks (EPFO, in India)

It seems like a simple list. But these sometimes involve a 100 different vendors and tools. Plus, we overlay another 100 strategies using additional information around geolocation, devices, social info, negative lists, scores, what have you. In the US there’s the 4506-T, DLV, SSA-89 form etc. 

Even when we tick all these boxes something can slip through. I was reading about cases where the fraudsters passes KYC using the sophisticated Digilocker Aadhar face likeness test. Independently, the PAN card submitted passed the credit checks on CIBIL. While both documents check out, they belong to completely different people. And mostly they had very similar names often spelt differently like Rajiv v/s Rajeev – so easy to miss. I couldn’t help thinking about a name like mine. There must be like close to half a million ‘Shweta’s and a gazillion ‘Patel’s. The odds are definitely not on my side.

In another loan KYC fraud, it turns out the fraudsters were submitting fake pay stubs, with employment certificates plus tax documents (this costs as little as 20 grand), as per this study. In my own independent validation, even I found a few such helpful friends and their phone numbers 😊 whose services I hope I never need.

While all such fraud could have some controls in place, last week one story totally blew me away. A 29 year old was arrested for defrauding a private bank of some Rs. 552 Crore. Turns out this fraudster floated a dozen bogus companies and then took loans from this private bank in the name of its non-existent employees. He even religiously made contributions to the provident fund of his loyal employees, to ensure that no eyebrows were raised. Not eye brows but I do raise my coffee mug to him.