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Picture this: your team screens hundreds of resumes, interviews dozens of candidates, and finally lands on what feels like the right hire. Then, not long after day one, the cracks start to show. The skills don’t match the resume. Expectations aren’t met. And suddenly, you’re reopening a role you thought was closed—burning more time, budget, and trust along the way.
You’ve just experienced candidate fraud. In this example, it may have been a spoofed or AI-generated resume. But it can take many forms and just as easily could have involved system gaming, outsourced interviews, or crowdsourced cheating (we’ll dig into each of these later).
If you’re thinking, this wouldn’t happen to us, you’re not alone. But the data tells a different story. Employ’s latest Recruiter Nation report found that 23% of recruiters have already experienced candidate fraud—and Gartner predicts that by 2028, one in four applicants will be fake.
The question isn’t if fraud will hit your pipeline. It’s when.
At Employ, we believe detecting and fighting candidate fraud requires a layered approach—one that protects your business without sacrificing the candidate experience. In this post, I’ll walk through where fraud can show up across the funnel, how we think about stopping it, and what it looks like when those principles work in the real world.
Candidate Fraud: What It Looks Like and How It Hurts You
Candidate fraud isn’t a new concept—it’s always existed in some form. Historically, it showed up as small embellishments: a polished job title, stretched responsibilities, a resume optimized to better match a role. Technically dishonest, but often low risk.
AI changed that. Today, fraud is easier to execute, harder to detect, and far more damaging. AI-powered tools make it possible to fabricate experience at scale—or introduce entirely fake candidates into your recruiting funnel. In some cases, these bad actors aren’t even looking for a job. They’re looking for access to systems or data that can create serious security risks in the wrong hands.
Stopping candidate fraud starts with understanding how it shows up and what it can cost you.
The Tactics Powering Modern Candidate Fraud
While fraud continues to evolve, most cases fall into a few recurring patterns:
- Overemployment: When an employee holds multiple U.S.-based roles at the same time—collecting multiple salaries while misrepresenting their availability, hours worked, or level of commitment to each employer. In some cases, this work is even outsourced to overseas contractors, allowing the individual to pocket the difference.
- Spoofed or AI-fabricated resumes: Resumes that appear legitimate at first glance but are partially or entirely generated by AI, making it increasingly difficult to separate real experience from fiction.
- Fake references and identity masquerading: This can range from candidates inventing references to third parties impersonating the candidate during interviews to help them advance through the process.
- Keyword stuffing and hidden text manipulation: Some resumes include hidden white text packed with job description keywords to game basic matching algorithms. In more extreme cases, candidates even hide AI prompts inside the document itself.
- System gaming: The use of bots, scripts, or automation tools to complete assessments or even respond to interview questions without genuine human input.
- Crowdsourced cheating: Online forums and communities (Reddit, “RecruitingHell” Threads) openly share interview questions, assessments, and strategies for bypassing hiring controls, turning fraud into a team sport.
The Real Cost of Candidate Fraud
Together, these forms of fraud create serious downstream problems for recruiting teams and the business as a whole:
The applicant avalanche: The average job now attracts more than 250 applicants, and sometimes many times that. As AI-powered tools make it easier for candidates to apply at scale, recruiters are forced to sift through higher volumes with less confidence in what they’re seeing. Candidate screening tools aren’t just a “nice to have” anymore—they’re essential to keeping hiring teams afloat.
The AI illusion: AI-enhanced resumes exist on a spectrum. Some candidates lightly polish bullets or adjust job titles to better match a role. Others fabricate entire experiences that never happened. What began as relatively harmless optimization has turned into an epidemic—one that leaves recruiters questioning whether resumes are still a reliable signal at all.
Real business risk: Hiring a fraudulent candidate isn’t just an inconvenience. In regulated environments, it can lead to fines, compliance violations, and serious reputational damage. In extreme cases, the cost to your business can reach into the millions.
Lost time and opportunity cost: Every fraudulent application consumes recruiter time—time that could be spent engaging real candidates, coaching hiring managers, or moving qualified talent through the funnel. The more fraud slips through, the more it quietly taxes your team’s productivity.
From Noise to Risk: Fraud Across the Hiring Funnel
Not all candidate fraud carries the same level of risk.
Early in the hiring process, fraud tends to be noisy and inconvenient—wasting recruiter time and attention. Later in the funnel, it becomes far more dangerous. As candidates gain access to more people, systems, and information, the potential impact of fraud increases dramatically.
Understanding this shift in risk was foundational when we developed Employ’s approach to fraud prevention. So, before we talk about layered defenses, let’s examine where fraud shows up across the recruiting funnel—and how the stakes change at each stage.
How Fraud Shows Up and Why Risk Rises
Source & Apply: At the top of the funnel, fraud is largely a scale problem. Fraudulent candidates—or bots—haven’t interacted directly with your hiring team yet, but they can overwhelm your systems and drain recruiter time. Common tactics at this stage include:
- Bots and automated applies
- Spam or low-intent applicants
- Mass applications submitted via AI tools
- Credential fraud and false resumes
While frustrating, the organizational risk here is still relatively low, and the damage is primarily operational.
Interview & Screen: As you move into screening and interviews, the stakes change. Fraudsters now have direct access to your people—and more opportunities to deceive them. This is also where tactics become more sophisticated and harder to detect. At this stage, we often see:
- Proxy candidates standing in for the real applicant
- Deepfake-assisted or AI-generated interview responses
- Voice spoofing or real-time coaching
These tactics often fall outside the expertise of even experienced interviewers, making fraud harder to identify without additional safeguards.
Select, Onboard & Hire: This is where fraud becomes most costly. A bad hire doesn’t just slow teams down—it can expose the business to serious legal, financial, and reputational risk. Common issues at this stage include:
- Fraudulent or fabricated references
- Stolen or misrepresented identities
- Continued impersonation after hire
Employ’s Risk-Based Approach to Fighting Fraud
Because both the tactics and the risk change as a fraudulent candidate moves through the funnel, fraud prevention shouldn’t be one-size-fits-all. It should scale with risk.
At Employ, we take a layered approach—what we think of as the Swiss cheese method. A single slice of Swiss cheese has holes. But when you stack enough slices together, those holes disappear. The same principle applies to fraud prevention: by layering the right safeguards at each stage of the hiring process, you close the gaps that fraudulent candidates rely on to slip through.
Here’s what that looks like in practice:
- At the top of the funnel: Bot detection, smart screening, and knockout logic catch fake and low-intent applicants early—without slowing down real candidates.
- In the middle of the funnel: Consistency checks help identify impersonation, plagiarism, and deepfake usage. As different interviewers engage with a candidate, these safeguards ensure everyone has a clear sense of who they’re speaking with—and whether that identity remains consistent.
- At the bottom of the funnel: Guided identity validation and verified reference checks provide confidence where it matters most. Before access is granted, teams can ensure the candidate truly is who they claim to be.
The Case Against Early ID Verification
You might be thinking: why not require ID verification at the application stage? It’s inexpensive and adds an early layer of protection against fake candidates. It’s also a question many teams are actively debating.
But applying ID verification too early comes with real tradeoffs.
Beyond adding friction to the application process and raising privacy concerns around sharing sensitive data with third parties, early verification can prevent real candidates from ever hitting apply. Consider a few scenarios:
- A transgender candidate whose right-to-work documents don’t yet reflect their current identity
- A job seeker who’s hesitant to share citizenship information early in the process
- An applicant with a diverse naming convention who worries about bias
In each case, the hesitation isn’t about fraud—it’s about fear of discrimination. And when ID verification is introduced too early, that fear can quietly narrow your pipeline, limiting access to qualified and diverse talent.
Closing the Gaps—Without Closing the Door on Talent
Candidate fraud is becoming more sophisticated, but the answer isn’t heavier controls everywhere or treating every applicant like a risk. It’s a smarter, more intentional approach that scales protection as risk increases.
At Employ, our fraud prevention strategy is built on three core principles:
- Secure and multi-layered: Swiss cheese has holes—until you stack it. The same is true for fraud detection. Layered checks across the hiring workflow close the gaps a single step can’t.
- Inclusive by design: Safeguards should protect your business without excluding qualified candidates or introducing unnecessary bias.
- Frictionless where it matters: Verification should appear only when the risk justifies it, so teams don’t lose great talent early in the process.
And this isn’t just theory—we’ve seen this model work in practice. DREAM Charter Schools teamed up with one of Employ’s ATS solutions, Lever, to apply layered fraud protections across their hiring funnel, using knockout questions, skills-based assessments, and clear expectations around AI use.
Download the case study to see Employ’s Swiss cheese method in action—or set up a demo to learn how to combat fraud across your hiring workflow.
