# Best Document Fraud Detection Software _Meg_ January 24, 2025 Document fraud is a significant threat to businesses. Wrecking reputations. Triggering huge financial losses. Regardless of industry, you’re a target. While artificial intelligence has eased so many business processes, fraudsters are exploiting the same technology to line their pockets. We need to take the offensive with document fraud detection software, powered by AI and machine learning, to fight fire with fire. --- ## **What is document fraud?** Document fraud is the creation, duplication, counterfeiting, or forgery of documents. The intent being, to deceive or **commit fraud for personal gain**. Targeted documents include financial, legal, identity, governmental, etc., etc. Document fraud can bring about devastating consequences, including financial losses, legal liabilities, reputational damage, and security threats. Which in turn will destroy customer trust, and can lead to identity theft, fraud, money laundering, and terrorism. Document fraud is accelerating in the finance sector because of the prevalence of KYC – know your customer – and onboarding data, with **forged documents being used** to buy property, apply for loans, file false insurance claims, and more. In March 2019, a fraudster pleaded guilty to billing Facebook and Google $123M+ over a three-year period, with **fake invoices**. Let me repeat. **Three years before they were noticed**! _If tech giants can fall victim to document fraud… so can you._ More recently, in 2023, the Federal Trade Commission – FTC – reported [1.1M+ cases of ID theft in the US](https://www.ftc.gov/), with document fraud the biggest contributing factor. While Europol reported a [25% year-on-year increase in document fraud](https://www.europol.europa.eu/) across Europe. ## **How does document fraud happen?** Your fraudster may be a dodgy person clumsily creating a fraudulent document that can be spotted with the naked eye. Or, a professional scammer who creates a near-perfect fake document that requires either years of experience or artificial intelligence to recognize. _I recently wrote a piece –_ [_Generative AI Is Fueling A Surge In Invoice Fraud_](/content/blog/generative-ai-is-fueling-invoice-fraud/index.html) _– discussing the part Gen AI plays in creating fake documents. And yes, the conclusion is that **the best way to tackle fake invoices is to fight Generative AI fire with AI fire**._ ## **The impact of document fraud on your business** The impact of document fraud on your business can be devastating, long-term, and irreversible. Knock-on effects include… ### **Operational disruption** Hit by document fraud, it’s inevitable that **resources must be diverted to investigate how the attack happened**. Shifting the focus from your core business activities. ### **Financial loss** There will be **money lost**, with fake documents often used for financial gain. Either via unauthorized access to funds, illegal transactions, or payments made/received for non-existent goods. ### **Reputation damage** Through no fault of your own, **a fraudulent attack can damage your reputation**, destroy customer trust, and kill relationships with vendors, partners, and employees. ### **Legal disputes** Chances are high, if your business suffers document fraud, there’ll be legal and regulatory issues. This **can lead to expensive litigation**. Even **loss of your business**. ## **Types of document fraud** The most common types of document fraud are… ### Financial fraud An individual or organization manipulates transaction documents, including invoices, cheques, bank statements, loan applications, and purchase orders, to commit financial fraud or embezzlement. ### Insurance fraud Fraudsters submit fake documents related to insurance claims. For instance, medical records, accident reports, invoices submitted for financial benefit. ### Mortgage fraud Mortgage fraud is the submission of fake documents – bank statements, tax returns, property appraisals – to get a loan or mortgage. ### Receipt fraud The manipulation or submission of duplicate receipts. Risks include illegitimate cashback or loyalty point payouts, and fraudulent expense claims. ### Forged documents Details altered, added, or totally replaced, for instance, adding a watermark, deleting or adding new pages, including fake or altered signatures, and adding fake seals. ### Social engineering Designed to trick people into sharing sensitive information such as bank details, to create fake documents or commit identity theft. Includes phishing scams or pretexting. ### Identity theft The theft of someone’s personal information – financial details, social security number, passport, driving license, etc., to impersonate them. The forged identity documents are then used to apply for credit, open bank accounts, submit loan applications, and more. ### Insider fraud/employee fraud When someone in your company has access to legitimate documents and exploits their position or authority. ### Counterfeit documents Replicas of official documents, such as currency, ID cards, passports, certificates, driving licenses, etc. ### Digital document fraud The falsifying or manipulating of electronic documents, digital records, or online transactions to commit cybercrimes against individuals or organizations. ## **Best practices for protecting your business against document fraud** Aside from document fraud detection software… ### **Keep your ear to the ground** Fraudsters never sleep. Crafting more devious and damaging scams for financial gain. ### **Train your team** Training them on document fraud detection and prevention should figure. Show your employees what to look for. How to recognize a manipulated document. **Make them aware**. ### **Use document fraud detection software** A document fraud detection system, powered by machine learning, AI, and natural language processing (NLP) is able to analyze and extract increasingly large volumes of data from various types of documents… **Identifying patterns and anomalies** that prove fraudulent manipulation of documents. ### Regular audits Regular audits are essential in your fight against document fraud. Ensuring the integrity of documents and maintaining compliance. ## **How to detect document fraud?** An AI-powered document fraud detection software that provides **validation and document verification** via automated document workflows, is the most effective way to find and stop fraud in its tracks. ## **Fight AI document fraud with AI** Rossum’s [transactional document automation](/content/transactional-document-automation/index.html) platform uses AI to read and analyze documents. **Able to identify the tiniest irregularities**. ### **Centralized monitoring and analysis** AI algorithms monitor and analyze incoming document traffic in real-time. ### **Data matching** This will prove the authenticity of the document by ensuring data aligns. ### **Natural language processing** Algorithms that analyze the language, finding anomalies in the linguistic patterns and detecting fraudulent documents. ### **AI image analysis** That examines graphic elements in documents – logos, signatures, etc. – to reveal alterations or inconsistencies. ### **Behavioral analysis and pattern recognition** Identifies patterns associated with genuine and manipulated documents. ## **Rossum’s document fraud detection solution** Through our ergonomic user interface, our platform enables efficient, reliable and fast human – AI collaboration for rapid transactional document processing. ## Document fraud detection FAQs **What’s an example of document fraud?** A genuine document, let’s say an invoice, created by a fraudster and sent to a business for payment. **How do you detect fraud in documents?** If you’re performing a manual review, look for… – Missing or altered numbers – Altered text or images – Data entry errors such as incorrect dates and names – Spelling mistakes **How does AI help with document fraud detection?** AI automates the analysis of documents for inconsistencies. Using optical character recognition (OCR) to identify recognized fraud patterns. ## **Protect your business against document fraud today…** An intelligent document processing solution will help you identify document fraud. From [data capture](/content/blog/what-is-data-capture/index.html), validation, and three-way matching, to [duplicate invoices](/content/blog/how-to-identify-a-duplicate-invoice/index.html) and mismatched data. **Our IDP technology will automate the analysis of large volumes of data**, **detecting discrepancies** that could be missed by manual processes.