AI can do things you’d never even think about doing. But fraudsters have thought about it. And they’ve even figured out how to use it to steal from you and your customers without you ever noticing.
1.6 billion pieces of consumer data were leaked last year. (Source) That’s 1.6 billion driver’s license, passport, or Social Security numbers of real people. What could a fraudster possibly do with that? They have ideas.
The rapid evolution of fraud in our current moment can’t be sensationalized or hyperbolized. It’s that big. It doesn’t need to be exaggerated. The numbers speak for themselves.
Does that mean we have to panic? No. We just have to be informed. That’s what this piece, and all of Fraudtober, is about.
This is the product of extensive research, dozens of conversations with fraud fighters, and proprietary data from companies that enable fraud defense at scale. And this is put together by contributors who can see macro-trends in fraud:
- Yardstik, whose technology is used by thousands of high-volume hiring companies to catch fraudsters and vet hires.
- Persona, whose platform serves thousands of companies by helping them vet the identities of their candidates, contractors, and employees at scale.
- Brian Davis, a seasoned fraud fighter who now leads a community with over 250 fraud fighters sharing insights daily.
- Amy Leff, who spent years building and leading Trust & Safety teams at a number of successful high-volume hiring marketplaces.
We’ve found 17 types of fraud that are rapidly accelerating in complexity and commonality.
Table of Contents
Identity
- Stolen identity
- Synthetic identity
- Fake work authorization
- Expired/suspended ID documents
- Multi-accounting
- Identity/account sharing
- Proxy interviewing
Biometric & Liveness Evasion
Credentials
- Fake diplomas
- License mills
- Fake certificates
- Doctored pay stubs
- False resume claims
- Reference fraud
Click into any type of fraud above to jump directly to it in this article.
Top 17 Growing Types of Fraud
We’ve grouped the 17 growing types of fraud into three categories: Identity, Biometric & Liveness Evasion, and Credentials.
In reality, some types of fraud could fit into multiple categories. But these groups answer the question of why these types of fraud are growing. The categories reflect common catalysts for the growth and evolution of hiring fraud.
Identity
Data breaches have made identity theft cheap and online hiring makes faking identities easy. When you put those two pieces together, you get rapid growth of identity-related hiring fraud.
Identity fraud is one of the two most common types of fraud that I’ve seen at marketplaces. This is any kind of fraud where folks are impersonating others. They might be using a real identity that is simply not theirs to bypass a check like a background check, or they might be using a synthetic identity.
– Amy Leff
Let’s look at the most common types of identity-related fraud.
1. Stolen identity
This is when an applicant uses someone else’s identity—name, SSN, DOB, or government IDs—to pass checks and get hired. It’s a real person applying, and they’re using a real identity. The only problem (and it’s a big problem) is that the identity they’re using doesn’t belong to them.
North Korean IT workers used 80+ stolen identities to land remote jobs at 100+ U.S. companies, causing losses of at least $3 million. Source
An Arizona woman was sentenced for using 68 stolen identities to defraud 309 U.S. businesses by placing North Korean workers in remote roles, generating over $17 million in fraudulently-earned income. Source
2. Synthetic identity
This is when an applicant fabricates an entirely new identity, often mixing real and fake details to create a “clean” record that passes checks. Unlike stolen identities, these aren’t tied to any real person at all.
One fraudster created and sold synthetic identity packages so fraudsters could easily get remote jobs at U.S. companies. Source
29% of all identity fraud cases now involve synthetic identities. Source
3. Fake work authorization
Applicants sometimes present stolen, borrowed, or fabricated documents—like Green Cards or Social Security numbers—to slip past Form I-9 or E-Verify checks. On paper, they look cleared to work. In reality, they aren’t.
Three Denver companies were fined over $8 million after employment audits revealed failures to properly verify work authorization. Source
4. Expired/suspended ID documents
Common in roles like last-mile delivery and rideshare, this fraud involves a candidate presenting an expired, suspended, or restricted driver’s license as if it were current to land a job where a valid license is required.
Yardstik data shows this type of fraud is very common in last-mile delivery and rideshare hiring, where a current license is non-negotiable.
5. Multi-accounting
Fraud rings or individuals spin up dozens—even thousands—of accounts to dodge bans, reapply after termination, or cash in on referral and onboarding bonuses. Even if most get blocked, the survivors can still cause major damage.
Cheap automation tools make mass sign-ups easy. If a ring creates 10,000 accounts and 99% are caught, the remaining 100 can still wreak havoc.
6. Identity/account sharing
A legitimate worker passes onboarding checks, then hands their approved account to someone else. The substitute gets instant access to jobs without ever being vetted.
Black-market brokers openly sell or rent ready-to-work accounts. In one case, Facebook group sellers offered DoorDash and Uber driver logins for $350–$430 outright or $115/month to rent. Source
7. Proxy Interviewing
Instead of showing up themselves, candidates send in a stand-in—often over Zoom or Teams—to ace the interview on their behalf. It’s a shortcut that sneaks unqualified workers past a critical filter.
KnowBe4 reported that many of their applicants from North Korea used fluent English speakers as interview proxies. The tactic was so common, they said the majority of applicants followed this playbook. Source
Biometric & Liveness Evasion
Identity verification has come a long way with live selfies, video prompts, voice checks. But fraudsters are adapting quickly. The good news: the best IDV providers are evolving too, layering in AI detection and liveness tech that actually raises the bar. The gap is widening between platforms that keep pace and those that don’t, and fraudsters know it.
8. Deepfake video/face swaps
Fraudsters use AI to alter their live video, or slip in a pre-recorded feed, so their face and voice appear as someone else. The goal is to trick liveness checks, match a stolen ID photo, or slip through a video interview.
Persona has seen a 50x increase in deepfake activity in the past few years.
The UK government projects 8 million deepfakes will be shared in 2025, up from 500,000 just two years earlier. That is a 16x increase in a short period of time. Source
9. Voice clones
Fraudsters mimic a real person’s voice in real time to pass as the candidate, a manager, or a reference. It’s convincing enough to spoof tone, cadence, and even background noise.
Criminals used AI voice to impersonate executives at one company, tricking an employee into sending around $25 million—the same tech shows up in candidate and reference calls. Source
10. Replay attacks
Fraudsters reuse a previously captured selfie or liveness clip and inject it through a virtual camera so it looks like a genuine live view. The system sees the camera capturing a video, but it’s actually a recording.
This means the same clip of someone nodding or blinking can be replayed over and over to pass checks. Without real-time gestures or camera integrity checks, a single stolen recording can fuel dozens of fake applications.
11. Environment/location spoofing
Candidates hide or fake where they actually are using VPNs, GPS spoofers, emulator tricks, or proxy devices. This allows them to qualify for roles that require being in a specific place (or to dodge geo-based rules and checks).
GPS manipulation has forced major gig platforms to tighten controls after drivers and delivery workers spoofed locations to grab trips or bypass regional restrictions. That kind of gap lets dozens of bad actors operate from anywhere while appearing local. Source
Credentials
Fraud isn’t always about who someone is, it’s often about what they claim to know or have earned. Diplomas, licenses, certificates, even pay stubs and references are all easy targets for forgery or shortcuts.
And when those slip through, the risks multiply fast: unqualified nurses on hospital floors, untrained drivers on highways, or fake managers vouching for hires who never worked there.
12. Fake diplomas
Candidates forge diplomas or transcripts to claim degrees they never earned, often targeting roles in healthcare, education, engineering, or finance where credentials are a hard requirement. On paper, they look qualified. In reality, they aren’t.
The FBI uncovered 7,600 fraudulent nursing diplomas sold across the U.S., which allowed unqualified individuals to slip into healthcare roles before the scheme was stopped. Source
13. License mills
License mills sell or shortcut professional licenses without requiring proper training or exams. Candidates walk away with paperwork that says “qualified,” even if they’ve never learned the basics.
A bribery scheme at a Washington truck driving school led to 110 drivers losing their CDLs after investigators uncovered licenses issued without testing. Source
14. Fake certificates
Forged or shortcut training certificates—like OSHA cards, forklift permits, or CPR/BLS credentials—let candidates bypass safety and compliance requirements without ever completing the training. It’s a shortcut that puts real people at risk.
Manhattan prosecutors found a training company pumping out 20,000 fake construction safety certificates. One untrained worker later died in a fall, showing how dangerous these shortcuts can be. Source
15. Doctored pay stubs
Candidates alter or fabricate pay stubs or earnings letters to prove prior employment, tenure, or salary, often to meet role thresholds or strengthen comp talks. The edits can be subtle: dates, employer names, or a few extra zeros.
A Times Union investigation into a major IT contracting program found consultants using fabricated backgrounds. Experts said fake pay stubs and employment letters were routine alongside other forged docs, leading to investigations, wasted money, and exposure to risk for the companies involved. Source
16. False resume claims
Candidates pad or invent pieces of their work history—titles, duties, even employers—to meet role requirements or climb into higher pay bands.
At scale, teams don’t always verify the details, so embellishments easily slip through unless you check.
17. Reference fraud
Some candidates hand over phony references—friends posing as former managers, burner phones and throwaway emails, or even paid “reference houses” that field calls and emails as a fake employer.
Mystery-shopping research found fake reference services charging about $129 per reference, often bundled with a fake employer website and live phone support to fool recruiters. Source
How to Stop The Growing types of fraud
The single most important place to stop fraud is at the point of hiring. Once a bad actor is through the door, the damage multiplies. Every incident costs companies an average of $1.7 million—and that’s before you count reputational hits or legal exposure. (Source)
The best way to win is simple: don’t let incidents happen in the first place. Stop them before they start.
As Amy Leff explains:
One point I want to emphasize is how important it is to catch fraudsters at the point of hiring or onboarding onto a marketplace platform. This is critical. It can save marketplaces financial, reputational and legal damages.
Here’s three things to keep in mind.
First, once fraudsters are on your platform, they can do a lot more harm, whether it’s businesses or customers or other users.
Second, once fraudsters are on the platform, it’s also much harder and more costly to find them and remove them. So catching fraudsters earlier is the easiest way to do it and the most beneficial to everyone.
Last, if you have good fraud defenses in place at your hiring or onboarding stage, it’s kind of like having a really high security role with barbed wire and surveillance cameras. It’s a deterrent. Fraudsters will not want to try to get onto your platform because they know they can’t, so they’ll go elsewhere.
Catching fraud at the beginning of the user lifecycle is critical for marketplace platforms to avoid financial, reputational and legal harms.
So, how do you actually stop it? With the right tools. You need Identity Verification that’s more advanced than the fraud tactics, and it has to work hand-in-hand with modern background screening. That means:
- Identity Verification with liveness detection + AI detection to confirm the person is who they say they are.
- Criminal history screening to make sure they’re safe for the role and don’t have a record of fraud.
- Credential verification to confirm they’re qualified and not sneaking past with forged documents or inflated claims.
This isn’t just possible, it’s here. Yardstik has the first fully connected option on the market: identity verification from industry leader Persona paired with our technology-forward background screening, all in a single flow. One contract, one system, one solution to keep fraudsters out and protect your business from day one.
Fraud in hiring isn’t going away, it’s growing. And the price of letting even one incident slip through is too high to ignore.
The smartest companies aren’t waiting for fraud to show up. They’re investing in defenses that make hiring safer, faster, and more trustworthy for everyone involved.
Contributors
This article was researched, written, and vetted by the following expert contributors.
Yardstik
Yardstik is the measurably better screening technology for high-volume hiring companies. Their mix of screening, fraud, and compliance tools allow you to quickly vet and place candidates with confidence.
Persona
Persona is a leading voice in online identity. They are the leading provider of modern Identity Verification, operating in 200+ countries and 20 languages. They work across tough use cases in AI, marketplaces, delivery, hospitality, home/childcare services, and more.
Brian Davis
Brian Davis is an expert fraud fighter. He’s the author of the Bad Fraud Advice newsletter and the founder of The House of Fraud, a thriving community of fraud experts. He’s spent over ten years in the trenches, fighting fraud at companies like Scribd, Nearside, and Dodgeball. Brians is an Advisor at Marketplace Risk, Safeguard Events, and other leaders in fraud education.