Could a proper KYC strategy have prevented ‘The Tinder Swindler’?

‘The Tinder Swindler’, true crime documentary recently released on Netflix which highlights the rising importance of identity verification, and on a broader level, fraud prevention. Could a KYC procedure avoid this kind of situation? We have asked Guillaume Casterman, Director International Projects & Knowledge at Webhelp KYC Services for their take on it.

First, let’s start with a brief reminder on KYC (Know Your Customer). These processes are intended to validate individual user identity information through data collection and analysis. They are a regulatory requirement for many businesses, mostly in the financial and regulated sectors to tackle money laundering and fraud operations. KYC procedures are applied to a broader spectrum of businesses such as car rental, crypto transactions, online registries and many more, so why not dating apps? The recent Netflix documentary, ‘The Tinder Swindler’, showcases how easy it is for someone to fake their identity online, to manipulate and catfish innocent people. Shimon Hayut, an Israeli fraudster and convicted criminal, pretends to be a billionaire businessman named Simon Leviev. Through this fake identity, he seduces vulnerable women via dating apps and convinces them he is in danger and needs large amounts of money.

Could a KYC strategy have prevented ‘The Tinder Swindler’ from scamming innocent women worldwide? Well, it could have made it harder at least.

How? The first thing to consider is that the various loans and credit cards were not in his name, and have not been contracted through identity theft. This makes it hard to prevent. But then there are two types of money lending: direct from his victims’ savings, and through loans and credit cards that his victims contract in their name. What could have raised the alarms? Opening a large number of relatively small credits through different banks should be limited by a credit-check before lending the money, and not only a revenue check. This would limit the amount that can be swindled. Then there is the credit card. When the credit card that he is using gets maxed out, which happens fairly quickly and frequently, the maximum amount available is raised by sending a fake payslip to justify that the account owner has enough money. This is where a good KYC onboarding could have helped. If the proof of revenue had been cross-checked (tax receipt checked through the official website, for instance), the newly provided payslip with an absurdly high amount, compared to what was registered during the onboarding should have raised a red flag. It is then possible to ask for more documents, to check directly with the company if this employee exists, even to cross check the employer against a database of similar alerts raised by other banks in different countries. Bear with me, this is not an easy check. But it can be possible when externalizing the KYC procedure to a global expert who can use their own fraud database, on top of external fraud listing sources. With this additional internal check, it is possible to identify when a payslip has been used in multiple similar cases, and when some of them have led to fraud sanctions. This could have helped limit the amount that the victim was able to raise, and make it harder for the swindler to scam those women.

Without a solid identity authentication procedure, users are left vulnerable to potential fraudsters and malicious actors.

In August 2021, Tinder announced that users will be able to verify their ID on the app in the ‘coming quarters’, in addition to the existing photo verification feature. At first it will be on a voluntary basis. ID verification will also be used to cross-reference data such as the sex offender registry in regions where that information is available. Although this investment in security features is promising, Tinder doesn’t say if this will ever become an obligation for its new user to verify their ID. The other question left is, what about the 75 million existing active users?