Blockchain

How to Prevent Certificate Fraud in Education and Training With Blockchain

Published
November 23, 2022
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Dock has been developing Verifiable Credential technology to enable organizations to issue fraud-proof credentials since 2017.

This article explains how organizations can easily prevent certificate fraud and instantly verify if credentials are authentic or not.

TL;DR

  • Certificate fraud is the act of using a fake certificate to make false claims about someone’s qualifications or a product. Fake diplomas is a billion dollar industry and a growing problem around the world. 
  • Traditional verification processes are manual, time-consuming, and expensive which is why many organizations don’t even bother to check the authenticity of someone’s degree or training. When organizations don’t effectively verify credentials, this can often put workers or the public at risk, especially in the health care and construction industry.
  • Verifiable Credentials technology enables issuing organizations like educational institutions and training programs to create fraud-proof credentials. The technology allows organizations like employers to verify credentials instantly, efficiently, and at a lower cost.
  • Preventing certificate fraud keeps staff and the public safe, enhances the reputation of organizations, saves money, and reduces liabilities.

Introduction

Fake diplomas are a billion dollar industry and certificate fraud is a growing problem around the world.

You can get a fake certificate on the web in minutes for a low-cost. Rather than paying $66,000 or more getting an MBA or at least $40,000 to become an engineer, many people around the world are paying a few hundred dollars or less for a fake certificate to secure a high-paying job. 

An FBI agent went through the process of buying a fake degree and said, "I told them the date I wanted to graduate, the major I wanted, and the GDP I wanted. It was a cheapie. $500 for an MBA.”  

Options from a fake diploma site

Because traditional verification processes of credentials are expensive and time-consuming, many organizations don’t have an efficient way to prevent or spot fake credentials. For these reasons, many organizations skip the verification process altogether.

In one study with 1,250 senior management professionals, almost half of employers rarely or never check a candidates’ education credentials. Only 11% of employers who verify degree status say they never catch applicants lying while 24% say they frequently catch applicants. 

But now there is a solution! Thanks to Verifiable Credentials, organizations can prevent certificate fraud by:

  • Issuing fraud-proof certificates and credentials efficiently at a low-cost
  • Verify credentials instantly by simply scanning a QR code or using a simple verification tool

What Is Certificate Fraud?

Certificate fraud is the act of using a fake certificate to make false claims about someone’s qualifications or a product. Certificate fraud has increased globally for both physical and digital certificates. The definition of fraud is the wrongful or criminal deception with the intention of getting financial or personal gain.

We did a quick Google search for “Fake engineering degree,” and people can get a degree for under $100 with a simple online order. The product description on one website says, "Engineering is a wonderful career, which can pay very well. If you wish to embrace this type of career, you’ll need to attend school for a lengthy period of time. Or, you could take the easy path and place your order today. Once we’ve meticulously produced your engineering diploma, you’ll be able to show it off to all of your friends and watch as their jaws hit the floor.”

Risks and Costs of Certificate Fraud on Organizations and People

Construction workers
Hiring people with fake certificates puts workers, organizations, and the public at risk

Certificate fraud has many consequences for stakeholders including: 

  • Employers taking risks by recruiting unqualified staff could be exposing themselves to liabilities and lawsuits if there is an injury or death from hiring an unqualified worker
  • The devaluation of legitimate degrees and certifications from universities, colleges, and training organizations
  • Unfairness towards students who spend a lot of money, time, and effort earning their degrees and training honestly

The Association of Certified Fraud Examiners released a report based on a 2018 global study on occupational fraud. This is the largest and most comprehensive study of occupational fraud to date.

Key points from the study: 

  • Collectively, occupational fraud cost $7 billion in actual damages across 23 major industry categories ranging from small local businesses to multinational corporations with thousands of employees.
  • Occupational fraud is extremely costly as 22% of frauds caused at least $1 million in losses. A typical organization loses 5% of its annual revenues to fraud.
  • Fraud schemes can be very hard to detect and the typical occupational fraud lasted 16 months before it was discovered.

Even beyond financial damages, many lives around the world have been unnecessarily lost or severely affected directly as a result of people with fake credentials, particularly fake doctors, nurses, and engineers. 

Risks of Deaths and Injuries From Fake Engineering Degrees

It is unfortunately common in different countries where unqualified engineers have overseen or inspected buildings that have resulted in deaths or injuries. Credential verifiers often don’t adequately check or authenticate the certificates of engineers which puts many people at risk of injury or death if a part of a building breaks or the whole building collapses.

Gerald Shirtcliff stole the identity and falsified credentials of a professional engineer and faked an engineering degree. He supervised the construction of a building that collapsed killing 115 people.

Gerald Catt, an engineer from Ontario said his credentials were forged on documents for construction projects across the province. His professional seal and signature were used to confirm the safety of mechanical, electrical, and plumbing systems he had never worked on or heard of. Despite irregularities with how his seal and signature appeared, he was surprised that no one ever contacted him to confirm if the documents were legitimate. Some of the buildings were found to be open to the public without municipal officials having received a final safety report at all.

Catt says inspections ensure that the mechanical, electrical, and plumbing systems work and are safe. When reviews are skipped the public is put at risk.

Impacts of Certification Fraud in Health Care

There are millions of people around the world, including doctors and nurses, working in health care with a fake degree. 

A banker who fantasized about being a surgeon did 190 operations after forging a certificate from the University of Oxford and worked for 14 months. Just as shocking, medical authorities in Germany never questioned his “training” in Britain even though he spelt doctor with a K on his bogus qualifications and misspelled the word "medicine."

Diploma Mills

A diploma mill is an organization that falsely claims to be a higher education institution and provides fake academic degrees or diplomas for a fee. Not only can people buy fake certificates for any degree, but fake universities are being created and the problem is getting worse. 

One famous example among many others was a diploma mill that operated from Saint Regis University in the US for 6 years. They made an estimate of $7 million selling fake qualifications to more than 9,600 customers in 131 countries. They offered degrees in social science, law, IT, marketing, and business administration.

An 8-year-old diabetic child in North Carolina died after a fake doctor, Laurence Perry, advised her mother to take her off insulin. Perry bought his qualifications from diploma mills.  

Limitation of Proposed Solutions to Fighting Certificate Fraud

Organizations and people proposed different ways to reduce or prevent certificate fraud. But the problem is these ideas still rely on people being able to detect fake certificates (which creates room for a lot of human error), manual processes, and document features that can still be replicated.

Suggestions to detect, reduce, or prevent fake certificates Limitations
Embossing stamps. Easy to forge.
Look for spelling mistakes. Human error, takes time, and manual process.
Custom branded holograms used on documents like IDs and passports contain a 3D image that are very difficult to impossible to copy using a scanner or photocopier. Technology has improved which makes it easier to replicate low-cost holographic seals. There are limited ways to verify this for an employer that is located far away.
Security inks on a document are invisible to the human eye under normal lighting conditions. They glow when they are passed through UV light, the ink glows. Technology advancements make it easier to forge these types of documents. These physical documents can’t be sent to a verifier like an employer and this method would require the employer to have a UV light. This is a time-consuming and manual process.
Train HR team or use third-party reviewers to spot fraudulent certificates. A lot of potential for human
error and relies on a manual process. It can be very expensive to hire third party verifiers.

How to Prevent Certificate Fraud Efficiently at Low Costs

Fortunately, now we have the technology to effectively prevent and detect certificate fraud.

Well-respected educational and training organizations are currently issuing fraud-proof degree certificates to students and course graduates. The famous Massachusetts Institute of Technology (MIT) gave some of their technology graduates the option of receiving secure digital credentials in addition to their physical diploma that can be presented to employers who can verify their authenticity. The Unviersity of Johannesburg will also issue blockchain-based certificates to students graduating from the institute to fight against fraud and fake documentation that is so common in South Africa.

Verifying organizations like employers, government agencies, or other types of verifiers can instantly check to ensure that the credentials are authentic by simply scanning a QR code or running it through a user-friendly verification tool.

So how is all of this done?

That’s the magic of Verifiable Credentials (VC) and blockchain. We’ll go over each of these terms and some examples of how all of these elements work together. 

How Verifiable Credentials Prevent Certificate Fraud

Verifiable Credentials are digital cryptographically-secure versions of paper and digital credentials that people can present to verifiers like an employer or government department.

In the Verifiable Credentials system, there are three parties:

  1. Holder: A user who creates their decentralized identifier with a digital wallet app and receives the Verifiable Credential. Examples: Job applicant or university student.
  2. Issuer: The organization that digitally signs a Verifiable Credential and issues it to the holder. Examples: University or health and safety training organization.
  3. Verifier: A party that checks if the credentials are authentic. Examples: An employer or government department. 
A Verifiable Credentials system has an issuer, holder, and verifier.
The Verifiable Credentials system is made up of the issuer, holder, and verifier

The holder has a secure digital identity wallet phone app, like the Dock Wallet, that allows them to fully own and control their digital identity and credentials. 

Verifiable Credentials in a digital phone wallet app.
This is how a Verifiable Credential like a university degree can appear in a holder’s Dock Wallet

It’s also important to know the basics of what cryptography is and how Verifiable Credentials leverage cryptography to prevent fraud and data security.  

Cryptography is a division in computer science that transforms data into formats that can’t be recognized by unauthorized users. Cryptography is used to protect digital data. A basic example is when a message is encrypted, letters are transformed to other characters and someone needs a digital key to open the message. Encryption is the process of taking a message and scrambling its contents so only certain people can look at your message. 

Verifiable Credential Technology Solutions

Current problem Verifiable Credential technology solution
University/college degrees and training certificates can easily be forged by people to secure employment Educational institutions and training organizations can efficiently issue fraud-proof certificates to graduates and trainees
Traditional, manual verification is expensive and time-consuming resulting in many employers not bothering to even check if certificates are authentic Verifiers like employers can instantly and efficiently verify if a certificate is authentic at lower costs with user-friendly platforms like Dock Certs
Proposed solutions to check the authenticity of credentials require people to be trained on how to spot fake credentials and manual processes, which means many forged certificates can be missed because of human error No training is needed to detect and prevent fraudulent certificates because the technology does it all for you
Exchange of data over email or other forms of communication is less secure and can be vulnerable to data breaches and hacks Enables secure exchange of data between the issuer, holder, and verifier

Instantly Verify Education Credentials at a Lower Cost

Traditional verification processes take days, weeks, and even months to verify the authenticity of someone’s credentials. It is an expensive and slow process regardless of whether an employer verifies educational and training certificates themselves or hires a third-party verification company because the process still often involves calling up an institution and confirming that the applicant did complete their degree. 

Verifiable Credentials enables organizations to instantly check the authenticity of credentials without needing to contact the issuer like a university or training organization at all!  

The Role of Blockchain in Detecting and Preventing Certificate Fraud

Blockchain is a system of recording information on a digitally distributed database that is shared among computers in the blockchain network. The way blockchain technology is designed makes it very difficult for bad actors to manipulate information or hack the system. 

The reason that blockchain adoption is continuously growing around the world is because it is an efficient way to keep accurate records of transactions and easily detect manipulated information and highly secure. 

When certificates are issued digitally with blockchain technology, people can’t forge it and verifiers would be able to instantly know if they are fake or not. Only authentic certificates would be indicated as being legitimate with an easy-to-use platform like Dock Certs

Learn more about blockchain here

How Do You Protect a Certificate? Step-by-Step Guide to Issue Fraud-Proof Certificates

With Dock Wallet and Dock Certs, you can easily create an issuer profile, which we call a decentralized identifier (DID), in order to issue fraud-proof certificates.

1. Create an account on Dock Certs and login. If you’re just getting familiar with the platform, you can use Test mode.

Turn on test mode in Dock Certs.
  1. Click Create Verifiable Credential on the top right.
Click Create Verifiable Credential
  1. Create the issuer profile (a university for example) and you can leave the Key Type to the default setting. Then select Create a DID.
Create an issuer profile (DID)
  1. Under the Credentials menu, select Issue and choose the credential format you prefer: Basic Credential or University Degree Credential.
Select your preferred digital credential format

  1. If you want to create your own customized template, select Create New Design. Otherwise, select Continue Without Design.
Continue with or without a digital credential design.

6. For this example, we'll continue without a design. To add credential recipients manually one by one, select Add Manually. To add recipients in bulk, select the Import Spreadsheet option.

Select the issuer profile and choose how you want to add recipients

7. If you add someone manually, you will enter details like this example below where we are identifying someone by their student number. Once you fill in all of the details, click Add Recipient.

Add recipient details

8. If you want to issue multiple credentials at once, select Import Spreadsheet and you can download the CSV template, fill it in, and upload it.

Download a CSV template to issue multiple credentials at once

9. You have the options to: 

  • Persist these credentials: This option will encrypt the credential by providing a password to access it and store it on Dock’s servers. The credential can be accessed and verified by a URL or QR Code. The recipient can scan the QR Code to import the credential into a wallet app. The credential can be deleted from Dock’s cloud whenever you decide.
  • Generate PDFs for these credentials: If you choose to persist the credentials, the PDFs will contain a QR code the recipient can scan to view and store their credential. 
  • Allow revoking of this credential: This can make the credential invalid at any time. If you leave this option unchecked, the credential can never be revoked and will always be verifiable.
  • Anchor these credentials: This adds a hash of the credentials you issue on the Dock blockchain that can be referenced later to verify when and who created it. 
Choose credential options

10. Select Issue Credentials.

Issue credentials

11. Download the credentials. It’s important to know that if you don’t persist or download the credentials, you can’t get them back after they have been issued. 

You can download the digital credentials

12. Here the PDF version of the credential:

PDF version of a digital credential

Example of How to Prevent and Detect Certificate Fraud for Safety Training

​Organizations will be able to save money, enhance their reputation, reduce liabilities, and keep their staff, customers, and the public safe by preventing and detecting certificate fraud. 

Benefits of preventing certificate fraud in trades

  • Reduces the chances of death or injury
  • Protection against legal liability
  • Avoid property damage
  • Improving employee morale as they know that the company cares about their well-being

Here’s an example of how health and safety organizations can effectively prevent and detect certificate fraud.

  • Holder: Tyler Pozo
  • Issuer: Work at Height Training Organization
  • Verifier: Construction company

  1. Tyler creates a profile with his Dock Wallet (DID). The wallet also holds all of his construction-related training certificates.
Tyler's personal DID

2. Tyler successfully finishes the Work at Height training course and the training organization digitally signs the certificate of completion.

3. The training organization issues Tyler the fraud-proof course completion certificate and he holds it in his wallet.

Tyler's Work at Height Training credential

4. Tyler applies to a construction company that requires Work at Height training. 

5. The construction company requests his certificate credential by emailing Tyler a QR code that he can scan with his Dock wallet.

6. Tyler gives authorization to the training organization to connect with his wallet and he shows them his certificate of completion.

Construction company requests authorization

7. The company instantly verifies the authenticity of his credentials without having to contact the training organization at all.

8. Tyler passes all of the interview rounds and gets the job.

If Tyler tried to send a fake credential, the company would instantly know that his credential was fake because the verification tool would show the document as invalid. This happens because Work at Height’s authentic digital signature that is registered on Dock’s blockchain wouldn't show up on the fake certificate.

Summary of Key Terms

Blockchain: A decentralized database that is shared among computers in the blockchain network that records information in a way that makes it very difficult to change, hack, or cheat the system. 

Decentralized Identifiers (DIDs): Cryptographically verifiable identifiers created by the user, owned by the user, and independent of any organization. DIDs contain no personal identifiable information. 

Holder: Someone who owns the Verifiable Credential and stores it in their digital wallet app.

Issuer: Person or organization with the authority to issue Verifiable Credentials.

Verifiable Credentials (VCs): Digital cryptographically-secure versions of paper and digital credentials that people can present to verifiers.

Verifier: The person or organization checking the credential.

Conclusion

Fake diplomas are a billion dollar industry and the global problem of people using fake certificates to secure employment is getting worse. This is largely because the traditional verification processes are expensive and time-consuming. Suggested solutions like using holograms, secure ink, or training HR staff how to spot fake certificates are inadequate to effectively detect and prevent certificate fraud because of the advancements in technology. 

Fortunately, organizations can now conveniently issue fraud-proof certificates and instantly verify the authenticity of certificates without contacting an issuer thanks to Verifiable Credentials technology. These technologies enable organizations to effectively prevent and detect fake certificates which keeps their staff and the public safe, reduces liabilities, save money, and enhance their reputation.

Learn More

About Dock

Dock is a Verifiable Credentials company that provides Dock Certs, a user-friendly, no-code platform, and developer solutions that enable organizations to issue, manage and verify fraud-proof credentials efficiently, securely, and at a lower cost. Dock enables organizations and individuals to create and share verified data.

“We’ve looked at a lot of the systems that allow you to issue DIDs and VCs and generally what we’ve found is that Dock is far easier to use than many of the existing tools out there. It can deploy very quickly and it will be very easy for our developers to use the tool.”
Amber Hartley
Chief Strategy Officer, BurstlQ

Start issuing Verifiable Credentials today

Dock Certs is an all-in-one suite of Verifiable Credential (VC) tools built for organizations to issue digital credentials and certificates that are automatically and instantly verifiable, fraud-proof and auditable.