Industry

Tackling reference fraud: how Konfir is eliminating the risk of fake reference houses

HR, recruitment teams, and screening providers are under increasing pressure to get candidates in the door fast. Alongside this, we’re seeing a rise in reference houses—entities that offer crash courses in certain skill sets and supply fake employment references and documents (source: Better Hiring Toolkit on Tackling Hiring Fraud). 

At Konfir we’re on a mission to eliminate this risk. 

Reference houses’ that provide fake employment, education, bank and identity references for jobseekers are one of the latest types of hiring fraud occurring in the UK’. (Source: Recruiter 2024).

Traditional employment verification

Employment referencing started with a letter, an envelope, and a rubber stamp; an important life-long document that constituted authentic proof of employment. Soon, however, employers clocked on to the risk of doctored documents and took it upon themselves to call an employee’s previous employer to verify employment information straight from the source (i.e. ex-employers). Finally, given relatively recent GDPR responsibilities, HR centralisation and efficiency gains, employers then opted for email over phone calls.

You can read more about traditional employment and ‘contact previous employer’ (CPE) model here.

Historically, these methods have been slow and cumbersome with manual processes often introducing delays and potential for error. With the increase in reference houses, at Konfir we’re seeing more and more examples of misleading or entirely fraudulent references being provided. According to a recent warning by Keith Rosser, hiring fraud is on the rise, directly linked to the operations of these reference houses. This growing trend highlights the urgent need for more reliable verification methods.

An example of reference fraud

Reference fraud can be simple or highly complex. What organisations need to eliminate this risk, is a secure way to identify reference fraud. 

An alarming instance of reference fraud involved eight individuals linked to an organized crime group. These individuals applied for positions within a financial services company using a fictitious company as their previous employer. This fake company had a seemingly legitimate website and even a registered entity on Companies House. The challenge here was for manual screeners to detect the deception—a failure to do so could result in a fraudulent individual being hired and potentially committing internal fraud. It’s known that businesses often refrain from pressing charges for smaller amounts to avoid public acknowledgement of having been defrauded, making it crucial to prevent such hires in the first place.

How Konfir is eliminating reference fraud

Konfir addresses the risk of reference fraud by ensuring direct access to accurate and verified data sources:

  • Direct data access: Konfir connects directly to authoritative data sources like payroll and tax records, ensuring the information used for verification is up-to-date and authentic, thereby bypassing unreliable third-party references.
  • Automated verification: By automating the verification process, Konfir reduces the verification timeframe from weeks to seconds, while also ensuring that data cannot be tampered with by anyone in the process.
  • Enhanced security: Konfir’s platform incorporates rigorous security measures and complies with GDPR, ensuring all data handling is secure and privacy-respecting.
  • Reference fraud check: Konfir instantly checks declared employer names against our database of ‘employer names’ that have been confirmed to be associated with reference fraud in the past, ensuing hiring mangers know when to apply extra care and due diligence.

“Any part of that process where a candidate or an applicant is submitting their own paperwork to us opens up, in theory, an element of risk because it could have been doctored. There is no risk when you are going straight to the source of that data. So it's something that our compliance team seems to be really happy about. Konfir held our hand through the security processes and that's made that process seamless for us.” Richard Horth, Adecco Group.

We need your help to combat reference fraud

We’re on a mission to eliminate reference fraud. But we need your help! 

We hold an ever-expanding database of known fraudulent reference providers, with over 100 organisations already identified. This initiative is crucial as it helps create a comprehensive blacklist of entities known for employment fraud.

Konfir encourages its clients to contribute to this database, enhancing the collective ability to combat reference fraud effectively. Every new entry helps refine the accuracy and reliability of employment verifications further, and by contributing your organisation will get uncapped access to the Reference Fraud Check as part of all future Konfir Employment Verifications. 

Click here to report a Fraudulent Reference House