Indian MNCs Lose ₹150 Crore to Employee Fraud, IDfy Report Warns

Indian companies may be facing a far bigger internal threat than previously assumed. According to the IDfy Workforce Risks and Hiring Fraud Report 2025, Indian enterprises lost over ₹150 crore last year due to employee-led and collusion fraud, highlighting a growing crisis in white-collar hiring and workforce trust.

The IDfy report, released on January 21, 2025, is based on 4.9 million real verification cases processed by IDfy during the year and draws on the firm’s 14 years of experience in identity verification, compliance, and fraud detection. One of its most striking findings: 195,163 suspicious white-collar hires were flagged before onboarding, preventing potentially severe financial, regulatory, and reputational damage.

Fake Documents Emerge as the Biggest Red Flag

A key trend, as per the IDfy report, dominating the 2025 fraud landscape is the explosive rise of fake and forged documents. Nearly one in five red reports last year was triggered by fabricated paperwork, making document fraud the single largest risk across industries.

Education credentials were the most exploited CV element, accounting for 69.9% of all fraud cases, compared to 16.9% linked to fake employment history. The growing use of AI-generated degrees, shell employers, and organised document fabrication networks has rendered traditional verification checks increasingly ineffective.

“Employee fraud today is no longer opportunistic—it is organised, repeatable, and tech-enabled,” said Ashok Hariharan, Co-founder & CEO, IDfy. He warned that the true cost of a bad hire now extends far beyond salary losses, often resulting in data exposure, regulatory scrutiny, stalled operations, and long-term erosion of customer trust.

Telecom, BFSI and FMCG See Rising Risk

Fraud in 2025 spared no sector, including those once considered low-risk. Telecommunications emerged as one of the most vulnerable industries, with fraud rates jumping from 7.7% in 2024 to 10.02% in 2025. Given telecom employees’ access to SIM data, customer identities, and network systems, even a single fraudulent hire can trigger large-scale compliance fallout.

Banks and NBFCs recorded the highest overall fraud risk at 12.01%, up from 11% the previous year. Alarmingly, legal-history red flags such as FIRs and court cases surged to 2.53%, posing serious regulatory and reputational threats in a sector where over 70% of employees handle sensitive financial data.

The insurance sector reported an overall fraud rate of 4.85%, driven largely by fake experience claims, while IT/ITES saw fraud rise to 7.55%, reflecting intense competition for specialised digital and AI talent. IT/ITES also recorded the highest ID proof fraud rate at 4.74%, signalling growing impersonation risks.

Fraud Goes Beyond Metro Cities

While metros like Mumbai, Bengaluru, Pune, Gurgaon, and Hyderabad continued to report high volumes of fraudulent credentials, the report notes a significant geographic spread. New hotspots such as Thane, Chennai, Mysuru, Indore, and Gautam Buddha Nagar underline how white-collar employment fraud is no longer confined to major urban centres.

Looking toward 2026, IDfy identifies deepfake-enabled impersonation, AI-generated credentials, insider fraud, and shell entities as emerging threats. With nearly one in eight background verification reports turning red, the report stresses that early-stage screening and continuous monitoring are no longer optional—but essential for businesses seeking to stay ahead of evolving fraud risks.