The Real Risks Of Candidate Fraud

Recruiting Future with Matt Alder - What's Next For Talent Acquisition, HR & Hiring?

The episode explores the escalating threat of candidate fraud in remote hiring environments, specifically focusing on organized criminal and state-backed

Key takeaways

• State-backed operations, specifically from North Korea, use stolen credentials to apply for remote roles to fund weapons programs.
• The primary motivations for these attacks include collecting paychecks and gaining access to source code, customer data, and intellectual property.

Main topics

• Candidate Fraud
• Remote Hiring Risks

Notable quotes

The aim is to access your data and your systems, your source code, your customer data, your intellectual property.

Conclusion

Employers must move beyond relying solely on background checks and sta

Transcript preview

Speaker 3 (0:00) Most conversations about candidate fraud are about using AI to cheat in interviews and fake skills and experience. There's a second kind of candidate fraud, though, that's far more serious, where organised criminal operations are using stolen identities to get inside of organisations. So are your candidates who they say they are? And what are the implications for your business if they aren't? Keep listening to find out. Support for this podcast is provided by Proof, the identity platform built for hiring. You've probably heard that by 2028, one in four job applicants is predicted to be fake. In fact, you've probably already seen that in your recruiting pipeline. Today, scammers are sending one person to get the offer and a totally different person to start the job. But most identity tools either only screen an application or verify a candidate's ID. Proof does both. Integrated directly with applicant tracking systems like Lever, from the first interview through to onboarding. So you have proof that the person you interview is the same real person you hire. You can learn more by going to proof.com. That's P-R-O-O-F dot com. Speaker 1 (1:23) more of scientific discovery, more of technical advancement and material progress in your lifetime and mine than in all the ages of history. Speaker 3 (1:37) Hi there, welcome to episode 825 of Recruiting Future with me, Matt Alder. Remote hiring, widely available deepfake tools and the harvesting of stolen identities have created an opportunity for organised crime in the hiring process. State-backed operations are also training workers to apply for roles using stolen credentials and proxy interviewers. The aim is to access source code, customer data and intellectual property once they're inside the organisation. Recruiters are on the front line here. And in many cases, the only tool they have to manage this huge business risk is their own judgment. So how seriously should employers be treating this? And what does a credible response look like? My guest this week is Lauren Fury. Principal Product Manager at Proof, where she leads product work on candidate fraud and identity verification. In our conversation, Lauren explains how these attacks work, where hiring processes are most exposed, and what TA teams can do about it. Hi, Lauren, and welcome to the podcast. Thank Speaker 2 (2:46) you so much for having me, Matt. It's nice to be here. Speaker 3 (2:48) An absolute pleasure to have you on the show. Please, could you just start off by introducing yourself and telling everyone what you do? Speaker 2 (2:56) Sure. My name is Lauren Fury. Currently, I'm a principal product manager working at a company called Proof, where we are really focused on ensuring that the candidate experience and candidate fraud pervasive problem is mitigated for our clients and we extend into other identity validation scenarios. My background actually comes from also having built products at Lattice as well as DocuSign and a long history of being really customer centric. So very excited to be here today talking to the people that we really care about. Speaker 3 (3:27) I think it's a really interesting topic because we're talking about candidate fraud. It's a very big topic in talent acquisition at the moment, but I think there are aspects of this that people just haven't thought of. So we're looking forward to hearing your insights on some of these things. So let's just start off and talk a little bit about the landscape. So this is a big issue at the moment. I think there are lots of things that kind of... all get rolled into one from candidates sort of using AI to embellish applications to people not being who they say they are all the way through to sort of serious criminal activity. Tell us a little bit about the part of that that you work in and what's kind of going on at the moment and why it's so important. Speaker 2 (4:12) I would say the landscape is changing rapidly, and I'm happy to kind of take us through a little bit more on why I think that is. But at the moment, the most pressing issues that we're seeing is clients dealing with different vectors of falsehood in the application process. So how do I sift through applications that are coming through from bots, which are these automated systems generating and submitting job applications at? And I'm not talking about an individual applying to 50 jobs. I'm talking about systems firing off hundreds of tailored applications. So that's one kind of vector that folks are dealing with. There's also this new presence of deep fakes. It's becoming more accessible and available. These video manipulation tools used to be really out of hand. out of reach of a normal consumer and they're not anymore. So now we see that showing up in the interview process. And it's a really unique and sometimes off-putting or scary experience for recruiters to deal with. And generally, we're seeing identity harvesting, which essentially means that these stolen identities, we just saw a news story about driver's licenses being made broadly available. That's exactly what these folks are doing. They're taking this real identity. adjusting it slightly and applying to jobs. So it seems like they are valid, but they're not. And they often use proxy interviewers through that process. So a lot of different ways in which this is manifesting for our recruiters and a lot of different ways in which they can filter through that or think about it or feel exposed right now. What Speaker 3 (5:47) are some of the motivations behind this? Because this isn't... This isn't about people trying to get a job they might not be qualified for. There's a lot more sort of serious things going on, aren't there? Speaker 2 (5:58) Yeah, it's actually quite serious. So to the point where the DOJ has put out notices to be on the lookout for these things, there's a lot of documented cases of foreign workers essentially trying to come through and get these jobs. And I think that can feel really... Far away and potentially like it would never happen to us, right? It feels like something that is so grandiose, it's like a fairy tale. But really what's occurring here is that these foreign governments, and we do primarily see this coming through from North Korea, but also others, they're running these organized, funded programs where workers are specially trained to apply for these remote jobs at Western companies. They use stolen credentials. They essentially are coming through under false identities. They can use AI-generated documents, or sometimes this is a great example of the utilization of deepfake technology. And why they want to do this is, it sounds so obvious when we start to say it,