1. Identity Theft

Fraudsters use stolen or fake identification documents to pose as someone else to open accounts, access services, or commit fraud.

This often involves stolen government-issued IDs, such as passports, driver's licenses, or social security numbers.

2. Synthetic Identity Fraud

Fraudsters combine real and fake information to create entirely new identities. For example, they might use a real social security number but fake a name, address, or date of birth. These synthetic identities are often harder to detect because they don't entirely match existing databases.

3. Document Forgery

Fraudsters provide counterfeit or altered documents (e.g., utility bills, bank statements, or IDs) to verify their identity. They may use software to digitally alter legitimate documents or create entirely fake ones.

4. Money Mules

Fraudsters recruit individuals (knowingly or unknowingly) to open bank accounts using their legitimate identities. These accounts are then used to launder money or facilitate illegal transactions. This often involves people who don’t realize the purpose of the account, or they are paid to open
accounts on behalf of criminals.

5. Impersonation Fraud

A fraudster pretends to be a legitimate business or individual in order to trick institutions into approving transactions or opening accounts. This type of fraud often involves elaborate social engineering tactics to convince institutions that they are dealing with a trusted client or business.

6. Falsifying Business Information

Fraudsters set up shell companies or provide false corporate information during KYC checks for business accounts. This can involve fake corporate registrations, altered financial records, or misrepresented beneficial ownership structures. These entities are often used for money laundering, tax evasion, or other illicit activities.

7. Front Companies

Legitimate-looking businesses are used as fronts for illegal activities. Fraudsters provide valid KYC documentation for these companies, but the underlying business activity is illegal (e.g., drug trafficking or money laundering).

8. Layering Multiple Accounts

Fraudsters open multiple accounts under different names or using synthetic identities to make it harder for financial institutions to trace illicit activities. They often move funds between these accounts to complicate tracking and create a web of transactions.

9. Compromised or Fake Biometric Data

As many institutions adopt biometric verification (e.g., facial recognition, fingerprint scanning), fraudsters have developed techniques to trick these systems, such as using deepfake technology or compromised biometric data.

10. Fake Address Verification

Providing fake or temporary addresses to pass address verification checks. Fraudsters may use short-term rental properties or addresses that don’t belong to them to provide false proof of residency.

11. Account Takeover Fraud

This involves hackers gaining unauthorized access to existing customer accounts by exploiting weak security or social engineering tactics to bypass KYC security layers. Once inside, fraudsters can update the account information, conduct transactions, or even apply for new services in the legitimate customer's name.

12. Phishing and Social Engineering

Fraudsters may use phishing schemes or other social engineering tactics to trick customers or employees into providing sensitive information (e.g., passwords, bank details) that can be used to bypass KYC controls.