The growing demand for online loans (pinjol) has led to an increasing number of platforms offering quick and easy approval—sometimes without requiring face verification or a selfie with an ID card. While this may seem convenient, skipping face verification compromises security and increases the risk of fraud.
Cybercriminals exploit this loophole to commit identity theft and account takeovers, resulting in unauthorized loan applications under someone else’s name. This harms both individuals and financial institutions.
Digital Fraud Risks in Online Loans Without Face Verification
Some loan platforms claim to offer no-face-verification loans to attract more users. However, face verification is a crucial security step in ensuring safe transactions and preventing fraud. Without it, online loan platforms are highly vulnerable to digital fraud, including:
1. Deepfake Fraud
Deepfake technology uses artificial intelligence (AI) to create realistic fake images, videos, or voices. Cybercriminals manipulate deepfake media to bypass biometric identity verification systems, such as facial recognition.
Fraudsters use deepfake to access accounts, approve unauthorized transactions, and impersonate legitimate users.
Between 2022 and 2023, deepfake-related fraud cases in Asia-Pacific surged by 1,540%, with Indonesia seeing a 1,550% increase within the same period. Cases such as fake celebrity endorsement videos highlight how deepfake is being weaponized to mislead the public.
2. Social Engineering Attacks
Social engineering is a psychological manipulation technique used to extract personal or confidential information from victims. Fraudsters use various tactics such as:
- Phishing (email scams)
- Smishing (SMS phishing)
- Vishing (voice phishing via deepfake calls)
In Indonesia, 99% of phishing attacks leverage social engineering to deceive individuals and businesses.
3. Account Takeover Fraud
Account takeover fraud occurs when cybercriminals gain unauthorized access to a user’s account, often through weak passwords or social engineering scams.
A real case in Indonesia involved a business owner in Malang who lost IDR 1.4 billion after clicking a fraudulent WhatsApp link. In 2024, 97% of businesses in Indonesia reported experiencing account takeover attempts.
4. Identity Theft and Document Forgery
Cybercriminals steal personal data to create fake documents or apply for loans under a victim’s name. Many victims unknowingly become liable for debts they never applied for.
Identity theft cases continue to rise, causing both financial and reputational damage to individuals and businesses.
These fraud cases emphasize the importance of strong identity verification processes, including face verification, to protect users from potential security risks.
Why Face Verification is Essential for Online Loans
Although some platforms offer loans without face verification, this step is crucial to ensuring transaction security. Face verification confirms that the applicant is the legitimate owner of the identity being used, preventing fraudsters from exploiting stolen data.
Without face verification, online lending platforms become highly susceptible to identity fraud, allowing criminals to use stolen or fake identities to secure loans. This not only harms identity theft victims but also financial institutions that approve fraudulent loans.
To counter deepfake threats and enhance identity verification security, leading companies are developing advanced fraud detection technologies.
One such solution is VIDA Identity Stack, which provides comprehensive identity protection, including identity verification, user authentication, and fraud detection. This technology is specifically designed to detect AI-generated facial manipulation and fraudulent documents, ensuring safer digital transactions.
VIDA Identity Stack: A Complete Solution for Digital Identity Security
To combat increasingly sophisticated digital fraud, VIDA offers VIDA Identity Stack, which consists of three key components:
1. Identity Verification
Accurate identity verification using advanced biometric technology ensures that individuals are the legitimate owners of the identity being used.
2. User Authentication
A strong multi-factor authentication system ensures that only authorized users can access services or approve transactions.
3. Fraud Detection
Proactive fraud detection identifies and prevents suspicious activities before they can cause harm.
By implementing VIDA Identity Stack, financial institutions and businesses can enhance identity verification security, prevent deepfake-related fraud, and protect user data and privacy.
Although no-face-verification loans may seem convenient, they come with significant risks. Threats like deepfake fraud and identity theft highlight the need for strict verification processes and advanced fraud detection technologies.
Adopting solutions like VIDA Identity Stack helps financial institutions and businesses safeguard transactions, prevent fraud, and maintain digital security standards.
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