The Hidden Cost of Fraud: Protecting Your Staffing Business from Identity Risks

Joy Henry, Executive Vice President, Americas

As a staffing company, you are trusted to deliver vetted professionals within tight deadlines. Your clients rely on you not just to find talent but also to identify and mitigate risk by screening potential talent for threats.  

The numbers are alarming. According to AuthenticID’s 2025 State of Identity Fraud, in 2024 alone: 

• 58% of businesses have dealt with fake or modified physical documents 
• 49% with video deepfakes 
• 47% with synthetic identities 

Thanks to advances in AI, fraudsters create highly convincing fake documents, pass skill tests using AI assistance, and manipulate video or audio to impersonate others during remote interviews. The widespread adoption of remote hiring increases the risks, since recruiters may never see their hire in person, making it entirely possible for them to interview one person, only for a complete stranger to show up for their first day of work. 

Synthetic fraud, which combines real and fabricated information, was the fastest growing type of fraud in 2024 based on TransUnion data. Fraudsters steal genuine SSNs, often from deceased or homeless individuals, and use it as a starting point to craft a seemingly legitimate alias for themselves. The ease of procuring SSNs on the dark web has accelerated the spread of synthetic fraud. 

The Risk to Staffing Firms and Their Clients  

For your staffing company and their clients, there is a lot at stake. Fake applicants can use their forged identities to conceal a criminal record or claim credentials they don’t have. Recruiters who fail to spot the impostor could, for example, recruit someone with a history of sexual abuse for a position involving vulnerable persons, or someone without the required credentials for a job in nursing. Other fake applicants could be looking to steal data, embezzle funds, or plant malware. One bad placement could expose your clients and put your own reputation at risk. 

Protect yourself and your clients with identity fraud solutions 

Fortunately for your staffing company, there are ways to fight back against identity fraud. 

Many background screening companies have risen to the challenge and developed solutions designed to analyze identity documents, applicant photos, and videos for discrepancies and red flags. These solutions are seeing widespread adoption across all industries, including staffing. 

Here are some answers to questions you may have asked yourself about identity fraud solutions. 

We have tight deadlines to meet. Will implementing identity fraud solutions delay the hiring process? 

Fortunately, identity fraud solutions don’t have to slow you down. Look for a digital identity solution that makes smart use of AI and automation to speed up the process. First Advantage’s Digital Identity provides a fluid, user-friendly applicant experience that typically takes no more than a few minutes. Applicants can complete the process anytime, anywhere using their mobile phone. 

What exactly does Digital Identity consist of? 

Digital identity tools typically rely on a combination of personal and biometric data and AI to confirm candidates’ identities. First Advantage’s Global Digital Identity is a robust, multilayered solution providing the following methods: 

• ID Document Review: Our technology compares applicants’ IDs to a database of hundreds of standard government-issue documents in order to verify its authenticity.
• Biometric Data: Validate an applicant’s biographic information, such as name, address, and other identifying information, against credit bureau records. 
• Liveness Detection with Facial Recognition & Biometric Matching: Applicants are asked to provide a real-time selfie for validation, which is matched to their government photo ID. Dynamic facial recognition and movement analysis tools are then used to help counteract deep fakes.
• Telecom & Device: Device- and telecom-based data, including device location, SSN, IP address, identity risk score, and more are used to confirm applicants’ identity.

Global Digital Identity is completed before the background check; this is important to avoid searching unverified personal data and to uncover more criminal records and other potentially relevant details.  

How does Digital Identity work? 

• Applicants begin by taking a photo of their ID using a mobile phone. 
• If the image is unclear, they are prompted to retake the photo for legibility. 
• The ID is automatically verified against database records for authenticity markers. 
• Applicants then complete a video selfie, enabling facial recognition and liveness detection to confirm they are a real person and that the ID belongs to them. 
• Once verified, applicants consent to share their identity information with First Advantage for background screening. 
• If a discrepancy is found, recruiters are notified that the applicant did not pass identity verification. 

As fraud tactics evolve, staffing companies must also evolve to effectively combat them. The cost of a single bad hire can be steep – not just financially, but in terms of client trust and brand reputation. By integrating digital identity tools into your hiring process, you can protect your firm, your clients, and your candidates. 

The right digital identity solution can help you stay compliant, secure, and competitive. Don’t wait for fraud to find its way through your pipeline. Stay ahead of the risk and deliver the trust your clients expect.  

To add Digital Identity to your screening program, contact our experts.