Loan KYC Frauds: Voter ID Has Highest Tamper Rate Followed By PAN Card, Says Report

Integrated identity platform, IDfy, in their recently released report on “KYC Risks in Lending” depicts patterns of fraudulent behaviour during onboarding procedures, after analysing various data points. The study highlighted that 1 out of every 14 loan applicants attempted to deceive KYC checks and fraud detection systems.

IDfy offers products and solutions for KYC, KYB, background verification, risk assessment and digital onboarding.

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IDfy said that the findings are the results it’s a pan-India survey with people from across age groups. The sample size was 80 million and the report was created analysing the data collected through lending companies and banks they are working with.

Key findings of the report;

Out of all the IDs accepted during loan applications, the Voter ID has shown to be forged the most with a 6.78% fraud rate, followed by PAN Cards at 3.84%, and Aadhaar cards at 3.11%.

The report also highlighted that 39% of loan applicants have a mismatch between the name and the ID submitted and 7.6% of borrowers submit photos that fail IDfy’s liveness check. This problem of document tampering and fraud is also widely prevalent in the employment and merchant onboarding space.

IDfy said it conducted field investigations that revealed that a fake employment certificate with complete stubs and tax documents can be produced for as little as Rs 20,000. This has helped 14% of loan applicants to lie about their employment status through fake documentation.

The report also uncovered that collection emails never reach up to 18% of loan applicants who often utilise disposable email IDs.

Ashok Hariharan, co-founder and CEO, IDfy, said, “A career banker once shared with me that lending risk can be classified in three buckets – ability to repay, willingness to repay and KYC. The KYC risks report is our attempt to help the industry take a deeper look at managing their risk, combat fraud and achieve regulatory compliance. With a better understanding of the pain points, lenders will be able to adopt the right solutions at the KYC stage itself.”