In 2023, AOG Technics, a UK-based distributor, was caught selling fake aircraft parts to United. The company did this scam by acquiring used parts, which they would then restore and sell as fresh by making fraudulent documentation (including forged signatures). This scam went on for five years.
When the news broke out, the entire aviation industry and even other companies were in shock. If such a well-regulated industry can be scammed by signature forgery for years, then it clearly highlighted the gap in the enterprise processes for detecting falsified signatures.
In this post, we will explain signature forgery in-depth and cover how you can improve your documentation workflows to avoid such fraud.
What is a signature forgery?
Signature forgery is deliberately imitating or falsifying someone else's signature to commit fraud. In the past, such frauds would be tracing or imitating someone's signature in bank checks or business agreements. But now, as technology evolves, signatures are also becoming digital. So, forgers are also using image-editing tools to manipulate or copy digital signatures.
Types of signature forgery
The following are the most common methods used by forgers for committing signature forgery:
1. Freehand simulation: In this type of forgery, the forger manually draws the signature by referencing the original signature.
2. Trace-over fraud: Traced signatures are closer to real as the forger traces the original signature onto the document.
3. Blind forgery: This forgery is more of hit and miss, where the forger attempts to replicate a signature without having access to the original signature for reference.
4. Automatic pen machines: This is a slightly advanced type of forgery where automatic pen machines are used. These are devices used to sign documents in industries automatically. Forgers are using these pens to replicate signatures.
5. Electronic forgery: With the rise of electronic signatures, forgers are replicating signatures digitally by using electronic image-editing software.
6. AI-based signature forgery: Forgers are taking advantage of AI. There are advanced AI-based signature forgery apps that can generate realistic signatures or alter signatures in documents.
Common targets of signature forgers
Forgers usually target the following common financial, legal, or business documents:
- Invoices
- Purchase orders
- Expense reports
- Contracts
- Lease agreements
- Non-disclosure agreements
- Partnership agreements
- Vendor agreements
- Licensing agreements
- Employment contracts
- Intellectual property documents
- Trademark applications.
Basically, the list covers all usual business documents, making every company susceptible to fraud.
3 Ways to detect a forged signature
The three most common ways to detect forged signatures are:
1. Handwritten analysis: Involving a handwriting expert to analyze signatures for authenticity.
2. Biometric analysis: Going one level above usual handwritten analysis and verifying fingerprints and other biometrics on documents.
3. Digital signature verification: Checking the authenticity of digital signatures using cryptographic algorithms.
How to prevent signature forgery | 9 Actionable ways
Moving from detection to prevention. Here are the top ways you can prevent any signature forgery at your organization:
#1 Move from wet-ink or eSignatures to digital signatures
The first and simplest way to protect from signature forgery is to move to digital signatures. Digital signatures differ from the usual eSignatures. Digitally signed documents come with a digital fingerprint that contains the email address, date and location of signatures, and identifying details of the device used to sign the document. You can use these fingerprints to check the authenticity of the document (in the case of any tampering, including signatures). Digital signatures are a more robust way to sign documents.
"Just like any signed contract, the other side can contest whether the e-signature is real or not. For example, scanned/pdf signatures are no more secure from forgery than a wet signature. In fact, some people use a pdf copy of their signature to apply to agreements – providing a signature that is easily copied and then set for use by anyone. The use of digital signatures can reduce a lot of the risks"
~ Sterling Miller, CEO and Senior Counsel, Hilgers Graben PLLC
Ten Things: Electronic Signatures (What In-House Counsel Need to Know)
Digital signatures in SpotDraft
SpotDraft is a contract lifecycle solution that secures legal documents from signature initiation to storage. You can send our documents for digital signature via SpotDraft. Any signed document in Spotdraft is encrypted using Digital Signature Certificates (DSC) from Entrust. This encryption ensures that any tampering with the document can be easily detected. Simply run the documents using Adobe Acrobat or any other verification tools to catch tampering.
Digital signature certificate in SpotDraft
#2 Use a digital signature solution that allows preset signatories
Another way to ensure that only authorized individuals access documents is to set signatories in advance. It limits signature authorization to pre-approved individuals and reduces the risk of unauthorized signature attempts.
Signing order in SpotDraft
SpotDraft allows you to easily set a signing order for documents. While sending documents for signature, you can mention the email address of the recipients who need to sign the document to allow only genuine signatures.
Setting signing order in SpotDraft
#3 Secure document links with an additional authentication system
Scammers are continuously looking for new loopholes in the system. Adding an extra layer of security is always wise. You can use solutions that secure your document links from unauthorized access. So, whenever anyone tries to open a link, they have to provide a one-time password for authentication.
Securing document links in SpotDraft
In SpotDraft, you can secure document links easily by enabling one-time password verification in workflow settings. Signing authorities will get a password to open the document. Documents cannot be opened without passwords, preventing any unauthorized access.
Change workflow settings to enable one-time password verification for opening document links
#4 Use a digital signature solution that provides an activity log
A digital signature solution with an activity log shows all the actions done on the documents. Having this log makes it easy to detect any unauthorized access or modifications to documents. Nowadays, all advanced contract life cycle solutions provide an activity log feature.
Activity log in SpotDraft
SpotDraft provides a chronological activity log with every action on the document, like edits, invitations, approvals, user comments, or status updates. You can easily track who made which edit and spot any signature tampering.
Sample activity log in SpotDraft
#5 Implement a digital signature solution with secure storage
A digital signature solution centralizes all documents in one centralized storage (mostly cloud-based). All these documents must be encrypted to prevent any external attacker from accessing or tampering with them.
Document encryption in SpotDraft
SpotDraft encrypts document data both at rest and during transit. Each document has a unique encryption key generated and backed by Google Cloud KMS. So, the data remains inaccessible even if any external party tries to open the file.
#6 Adopt a digital signature solution with role-based access model
Even within organizations, you wouldn't want everyone to have access to every document. It's better to use a signature solution with role-based access control that allows only authorized employees to access documents. This limits the chances of any insider tampering.
Access control in SpotDraft
In SpotDraft, you can set role-based access controls in documents and even specify who can perform which action. For instance, junior marketers can view documents but not edit them. Setting such detailed role-based access controls increases security and reduces document tampering scope.
Role-based access control in SpotDraft
#7 Use a digital signature solution compliant with laws
A digital signature solution compliant with relevant laws and regulations makes it a more trusted solution. International regulations recognize the signature, making it legally binding.
Compliance standards in SpotDraft
SpotDraft is compliant with key regulations, including ESIGN (USA), eIDAS (Europe), and ECA (UK). You can rest assured that the signatures are legally valid.
#8 Train employees
Another important step you can take to prevent signature forgery is to train employees about common tactics used by fraudsters to obtain their genuine signature for misusing it later. Also, provide them with clear workflows on how to handle sensitive documents. If you are planning to use a digital signature solution, it is best to provide detailed training to employees so they can use all its key features at its optimum for the best security.
SpotDraft training academy
SpotDraft has put together a training academy with detailed tutorial videos on how to use different security features — no need to conduct any explicit training.
#9 Conduct periodic audits
Conduct periodic audits to identify and mitigate any potential forgery risks. Use the below checklist to conduct effective audits:
- Revisit access to the documents to prevent unauthorized access.
- Review the activity log of the documents to see if there is any hint of document tampering.
- Check if all software is up to date
- Check for vulnerabilities in the network infrastructure.
Audit support in SpotDraft
SpotDraft brings all your documents together in one centralized storage, making it easy to plan and conduct any audits. With our activity log feature, you can easily check the actions done on all documents and detect tampering proactively.
What actions can you take after detecting forged signatures?
If you detect any issues in your audits, then don't worry. There are legal and law enforcement measures to deal with it. Follow these steps to handle the situation legally:
#1 Collect and preserve evidence
Firstly, collect the proof of forge signatures. Primary proof could be an activity log of the documents. You can conduct a further internal investigation to gather more proof, such as emails, witness statements, or any unusual activities.
#2 Consult legal team
Once you have the proof, discuss it with your legal team to identify your legal options for dealing with the situation. Work with your team to develop a solid case to address the forgery.
#3 Report the forgery as lawsuit
Report the forgery to the local law enforcement agency or police station. Provide them with all relevant details and evidence. If the perpetrator crosses state lines, you can report the incident to the Federal Bureau of Investigation (FBI).
#4 Follow up on the case till criminal prosecution and penalties
Lastly, monitor legal proceedings till the accused gets punishment and pays any required penalties. You may be asked to testify in court to support the case. It's important to follow through till the end not only to recover losses but also to set a good example.
What is the punishment for forging a signature?
Punishment for signature forgery can vary depending on the jurisdiction and the severity of the offense. For instance, in some forgery cases in the US, the criminal got up to 3 years of imprisonment (with a fine), and some cases demand 10 years of imprisonment. However, common legal consequences of signature forgeries across jurisdictions include:
- Imprisonment
- Criminal fines
- Compensation
- Community service
- Probation.
Reduce the risk of signature forgery with SpotDraft
SpotDraft secures legal documents from tampering at every stage with the below features:
- Compliance with government regulations for the authenticity of signatures
- Encryption to prevent external attackers
- Access control to block internal unauthorized access
- Centralized storage for easy tracking and audits
- Activity log to detect suspicious activity
Safeguard your business from signature forgery! Book a quick demo to see all the features in action.
Frequently Asked Questions (FAQs):
1. What are the types of signature forgeries?
The most common types of signature forgeries are freehand simulation, trace-over fraud, blind forgery, automatic pen machines, electronic forgery, and AI-based signature forgery.
2. What is the penalty for signature forgery?
Penalty for signature forgery varies depending on the jurisdiction and the severity of the offense. However, common penalties include imprisonment, criminal fines, compensation, community service, and probation.
3. How to detect a forged signature?
You involve handwriting or biometric experts to detect forged signatures for physical documents. If the document is digital, all advanced digital signature providers provide an activity log to check for any signature tampering in the document.
