What is Identity Fraud? Strategies for Protecting Your Business in 2025

In 2024, identity fraud emerged as a growing threat, with fraud accounting for almost 40% of all recorded crime. During the first half of the year alone, 214,882 cases were filed to the National Fraud Database (NFD), representing a 15% increase compared to the same period in 2023. These figures highlight how businesses and individuals are increasingly targeted by sophisticated identity fraud schemes.

A notable example involved a Missouri woman who attempted to fraudulently sell Elvis Presley's Graceland by creating false documents and forging signatures. This case underscores the extreme lengths fraudsters will go to exploit identity information for financial gain.

In this blog, we’ll define identity fraud, examine its impact on businesses, uncover common attack methods, and provide actionable strategies to protect your organization in 2025.

What is Identity Fraud?

Identity fraud occurs when stolen or fake information is used to commit malicious actions, such as stealing money, accessing sensitive data, or deceiving others. For businesses, this can involve criminals pretending to be executives, employees, or even the company itself to carry out scams.

It’s important to understand the difference between identity theft and identity fraud. Identity theft is the act of stealing someone’s personal or business information, like login details or financial records. Identity fraud, on the other hand, happens when that stolen information is used to trick people, steal money, or gain unauthorized access. For example, fraudsters might impersonate a company’s CEO to approve fake payments or access confidential systems.

Watch the video below to see the real story of an identity fraud case.

Businesses are prime targets because of the potential for large financial payoffs and access to valuable data. Recognizing and preventing these schemes is crucial for protecting your organization.

How Identity Fraud Targets Businesses

Identity fraud is a significant threat to businesses because it exploits trust and weak points in operational processes. Cybercriminals use a range of tactics to manipulate employees, vendors, and even customers, often resulting in financial losses, data breaches, and reputational damage. Here are some of the most common ways identity fraud targets businesses:

1. Employee Identity Exploitation

Attackers often use stolen credentials to infiltrate internal systems, such as HR or financial databases. With access to these systems, they can steal sensitive employee data, payroll information, or intellectual property. For example, a stolen employee login could allow attackers to extract Social Security numbers, leading to identity theft cases among employees and subsequent legal actions against the company.

Watch how cybercriminals stole data of all Fed employees – past and present below.

2. Executive Impersonation (CEO Fraud)

Criminals impersonate senior executives via email, phone, or even deepfake voice technology to authorize fake transactions or access confidential information. For instance, fraudsters might send an email from what appears to be the CEO, instructing the finance team to urgently transfer funds to a fraudulent account. These scams, known as Business Email Compromise (BEC), have resulted in billions of dollars in losses globally.

Watch below the real example of Business Email Compromise (BEC).

3. Vendor and Supplier Fraud

Attackers pose as legitimate vendors or suppliers by using fake invoices or altering bank details on legitimate communications. Businesses, operating under time pressure, often unknowingly process these payments. Such schemes not only result in direct financial losses but can damage relationships with actual vendors when legitimate payments are delayed.

Watch Keepnet’s real-life example of a vendor scam.

4. Corporate Identity Misuse

Fraudsters set up fake websites, social media profiles, or email domains resembling legitimate businesses. These are used to scam clients, partners, or even job applicants into providing money or sensitive information. For example, attackers might create a fake business website to collect payments from unsuspecting customers, tarnishing the reputation of the real company and eroding trust in its brand

Watch the video below for a real LinkedIn job offer scam example from Keepnet.

Sophisticated Techniques Used in Business Identity Fraud

Modern identity fraud uses clever and targeted methods to trick businesses. Criminals take advantage of weak points in technology and human behavior to carry out their schemes. Even skilled professionals can fall victim to these well-planned attacks. Here are some common tactics fraudsters use:

Spear Phishing and Whaling

Fraudsters send carefully crafted emails that look legitimate, targeting specific individuals like executives or key decision-makers. These emails often contain fake links or requests for sensitive information, tricking the recipient into providing confidential data or approving unauthorized transactions.

Deepfake Technology

Attackers use artificial intelligence to create fake but realistic audio or video clips that impersonate company executives. These deepfakes are used to issue fraudulent instructions, such as transferring money or revealing sensitive details.

Business Email Compromise (BEC)

Criminals gain access to a company’s email system by phishing or hacking. Once inside, they manipulate ongoing conversations or create new ones to trick employees into transferring funds or sharing sensitive data.

Dark Web Data Sales

Fraudsters purchase stolen information, such as login credentials or personal data, from the dark web. They use this information to access corporate systems, impersonate employees, or carry out further scams.

For example, hackers breach a company and steal email addresses linked to cryptocurrency accounts. These are then sold on the dark web, allowing buyers to access accounts and steal funds. Similarly, stolen payment card details, especially those with PINs, are sold to create cloned cards for fraudulent purchases.

By recognizing these methods, businesses can take proactive steps to protect themselves from identity fraud and minimize the risks of falling victim to these sophisticated attacks.

The Real-World Impact of Identity Fraud on Businesses

Identity fraud poses serious risks to businesses, often resulting in significant financial losses, reputational harm, and operational disruptions. Here’s a closer look at how it impacts organizations:

Table 1: Detailed Breakdown of Fraud Impacts on Organizations

This table provides a comprehensive overview of the topic while making it visually structured and easy to follow. Each category is broken down into specific impacts and detailed actions to make the content more engaging and unique.

Actionable Strategies to Protect Your Business from Identity Fraud

Protecting your business from identity fraud requires a proactive approach that combines employee training, strong security policies, and advanced tools. By addressing vulnerabilities, you can reduce the risk of financial losses and operational disruptions.

1. Train Employees on Fraud Prevention: Equip employees with the skills to identify phishing, fraudulent requests, and other tactics used by attackers.
2. Enforce Zero Trust and Multi-Factor Authentication (MFA): Require verification for all access requests and implement MFA to add an extra layer of security to sensitive accounts.
3. Monitor and Respond to Threats: Use threat intelligence to track signs of breached data, such as stolen credentials on the dark web, and respond proactively.
4. Strengthen Vendor and Partner Communications: Verify transactions and communications with secure channels to prevent fraudsters from exploiting these relationships.

Implementing these strategies can help your business stay ahead of identity fraud threats and maintain a secure environment.

How Keepnet's Human Risk Management Platform Addresses Identity Fraud Threats

Keepnet's Human Risk Management Platform empowers businesses to prevent, detect, and respond to identity fraud with tools tailored to address human vulnerabilities. Here's how it works:

1. Phishing Simulation

Keepnet Phishing Simulator enables organizations to conduct realistic phishing simulations, replicating real-world fraud scenarios. These exercises identify employee vulnerabilities and strengthen their ability to recognize and respond to phishing attempts effectively.

2. Tailored Security Awareness Programs

Keepnet Security Awareness Training has customizable training modules that educate employees on advanced fraud tactics, such as spear phishing and deepfake threats. These programs ensure that your team remains vigilant and well-equipped to handle evolving fraud schemes.

Check out the infographic below to see how Keepnet's Annual Security Awareness Program integrates simulations, training, quizzes, and visual materials to build a strong cybersecurity culture throughout the year.

3. Human Risk Scoring and Outcome-Driven Metrics

Keepnet tracks employee behavior and assigns a Human Risk Score, highlighting areas of vulnerability within the workforce. Using outcome-driven metrics, businesses can measure the effectiveness of training programs, evaluate employee improvement, and identify areas needing further attention. These metrics include phishing simulation success rates, training completion rates, and employee responsiveness to real-world scenarios, providing a comprehensive view of security behavior and culture.

To dive deeper into these metrics, explore our blog post on Security Behavior and Culture Metrics.

Explore the infographic below to see how Keepnet's Human Risk Score identifies employees with the highest risk levels, enabling targeted training interventions and improved security awareness across the organization.

As an additional layer, Keepnet incorporates the concept of a Protection Level Agreement (PLA) to establish measurable benchmarks for security awareness performance. The infographic below demonstrates how PLAs track key metrics, such as click rates, reporting rates, and repeat clickers, over time.

By monitoring these metrics, organizations can identify areas for improvement and implement targeted strategies to enhance their overall cybersecurity posture.

4. Incident Response and Threat Intelligence

The Incident Responder analyzes suspicious emails, scanning URLs, IPs, and files through multiple integrated technologies. It takes automated actions, such as isolating malicious emails, directly at the inbox level to contain threats.

The Threat Intelligence product continuously monitors the web for signs of potential breaches or exposed data, including emails. By identifying data leaks early, it enables a rapid defensive response, reducing the risk of fraud and minimizing damage.

5. Executive Reports

Keepnet provides comprehensive executive reports that offer actionable insights into the organization’s overall security posture. These reports highlight risk scores, training program effectiveness, and employee performance metrics, enabling leadership to make informed decisions and strengthen the company’s defenses against identity fraud.

With its combination of actionable insights, targeted training, and advanced response tools, Keepnet’s platform ensures businesses can mitigate identity fraud risks and maintain a robust security framework.

Delve into Keepnet’s Executive Reports Guide to discover how these insights can empower your organization to stay ahead of evolving threats.