Identity verification for remote onboarding of external contractors
Digitalization is transforming workforces in 2021. Remote work and outsourcing are on the rise and with it so is remote hiring, as well as the need for remote employee management. While the current trend towards remote work is largely fuelled by the corona pandemic, the ongoing digitalization of the workplace over the past few decades plays a much larger role – if the work can be completed with a computer, it can be outsourced. While the pros and cons of remote work differ depending on who you ask, one thing is clear: working from home introduces a whole host of new challenges for employers.
The scope of this article focuses on the employer and specifically the challenges of remote recruitment, remote hiring and the remote management of employees. In particular, this article looks at the issue of workforce fraud. Given the nature of remote hiring and remote working, there is essentially no way to ensure (without a doubt) that the person at the other end of the agreement is who they say they are.
Digitalization and digital onboarding
There are fraudsters who pose as jobseekers whether for short term freelance assignments or more permanent roles that require advanced skillsets. Employee or contractor fraud occurs across all industries that use remote workers or outsource part or all of their workforce. Fortunately, there are solutions available on the market to combat this fraud in order to ensure the integrity of remote workforces today. These “digital onboarding” solutions are able to verify with a high degree of accuracy that the people working in or for your organization are indeed who they say they are.
The best solutions apply the latest advancements in computer vision, machine learning and facial recognition technologies and have been proven to be extremely accurate in verifying online identities.
Remote work and fraud
In principle, the solution for hiring and managing your external workforce is clear: a careful vetting of potential employees followed by a rigorous background check. Following that, a regular (daily or weekly) checkup to ensure that targets are being met and that quality is being maintained. However, in reality, this is a lot easier said than done and the processes involved take resources from your company that could be better used elsewhere.
For the remote hiring phase, in particular, it is difficult to know whether the documents submitted by the potential new hire are indeed authentic and actually belong to that person. What if the documents were purchased off the darknet (see below) and are being used fraudulently?
There is a growing epidemic of identity fraud. Some of these fraudsters pose as job seekers and use fake identities to apply for jobs; whether at small companies, massive corporations, not-for-profits or government institutions. Fraud occurs across all industries that outsource work from banking to construction, healthcare, insurance, energy, rail and utilities; the list goes on.
Fraudsters hide behind well-designed facades of fake identities; they use fake names and titles, as well as fake social media profiles and fake resumes to ply their trade. It is a highly-skilled art, in which not only the gullible fall victim but also the skeptical. Once the fraudulent employee or contractor is successfully onboarded they might finish just enough work to remain below the radar, such that nobody notices. Or perhaps, the finished work or materials used will be of subpar quality and the fraudulent contractor will have disappeared before anyone notices.
Depending on the industry, fraud can take a variety of different forms. In banking, it might be the case that fraudulent employees steal customer access codes and other personal data. In the construction industry, fraud might involve billing for incomplete or subpar work with poor materials. Fraud in healthcare might involve not having the necessary credentials to work in the role applied for. Fraud in the energy sector might see valuable trade secrets stolen and sold to their competitors.
5 outsourcing fraud techniques you should be aware of
- Paid for work, left unfinished. Some fraudulent job seekers ask for an upfront down payment and then never finish the work.
- Lying about the number of hours worked. It is really difficult to track how many hours your remote employees actually work.
- Overestimating budgets or going over budget. With limited oversight of the workflow, it is nearly impossible to budget accordingly. Fraudsters will take advantage of this.
- Intellectual property theft and stolen ideas. Whether patent infringement, trademark or copyright violations, or the disclosure of trade secrets.
- Identity theft. Fraudulent employees could use your name/bank account details and steal from your company accounts.
The fraudsters toolbox
The fraudulent jobseeker is well-practiced in the art of, well, applying for jobs. These days most hiring takes place online and interviews are usually held remotely through an internet call. A fraudster can easily spoof the location of this call using a virtual private network (VPN). The fraudster submits copies of the fraudulent documents which they purchased from the darknet. Finally, many companies do not have the wherewithal to do a full background check anyways and they often simply copy over the information as it appears on the identity documents.
You might be wondering just how easy it is to purchase fake documents on the darknet. For the majority of people, the darknet is this seemingly mythical place often talked about but never fully understood. It is, however, very real and easy to get to. Fraudsters who visit the darknet to purchase fake ID documents are also able to learn about the latest tools of their trade there. Have a look here at the current pricing for ID documents and other personal information being sold on the darknet. You might be surprised at how affordable they are. Current reports say that identity theft is rapidly expanding, with estimates that 1 in 5 Europeans have experienced identity theft over the two years from 2018-2019.
In addition to darknet-sourced documents, fraudsters must also be able to cover their tracks. The most important tools are the ones required to cover their “digital fingerprints”. This is possible by using advanced privacy software such as Antidetect and Kameleo, which allows fraudsters to construct fake virtual profiles. In addition, a VPN service and the TOR browser allows the fraudster to spoof their location and hide their online location, which is useful when visiting the darknet.
All of this begs the question, is there anyway to slow down and eventually stop this worrying trend?
PXL Vision’s digital identity verification solution
PXL Vision has the solution in its digital onboarding platform which allows you to verify the identities of the people in your workforce with an accuracy of greater than 99%. Our fully-automated solution takes a photo of the user’s ID documents, followed by a live video selfie of the user. The software then compares the photos from the ID documents to the video selfie of the onboarding user.
PXL Vision has just released its online identity verification solution Daego® – Identity Verification for workforces on the SAP® store where it is directly integrated into the SAP® Fieldglass platform.
SAP® Fieldglass helps businesses to engage with their workforces more efficiently and later manage all aspects of their external workforce from sourcing to on-boarding and off-boarding, invoicing, payment and more.