ID Verification - KYC

Why You Need to Go Beyond Just CPF for Accurate Identity Verification in Brazil

Emma Lindley

January 20, 2023
February 23, 2024
Table of Content

Relying solely on CPF verification can impede fraud prevention efforts. Gambling operators must combine CPF verification with KYC checks for more accurate user authentication and to ensure compliance with the prevailing laws and regulations

Brazil is ranked as the second most advanced country in the world in terms of the digitalization of public service structures. However, complexities in identity verification expose citizens of the country to a higher risk of identity fraud. Most of these complexities arise from reliance on CPF as the primary identifier.

CPF, short for Cadatro de Pessoas Físicas, is an identification number assigned to every Brazilian citizen, much like the Social Security Number in the US. It is an 11-digit number, where the first nine digits include a person’s date of birth, gender, and the state of registration, while the last two digits are used as a control number. The Brazilian government uses CPF extensively to keep track of an individual’s financial activities.

CPF is a central element in identity fraud

Being a static identifier, with elements that can be easily guessed, CPF is rather easy to compromise and use for a number of fraudulent activities. 

Furthermore, massive breaches of the CPF database have made them easily accessible for fraudsters to use in attacks; notably 2021 saw a massive leak where more than 220 million CPFs were compromised. This leads to a massive increase in fraud attacks such as fake new accounts, bonus abuse, account takeovers, or underage gambling, among others.

Fraudulent use of stolen or compromised CPF numbers not only causes financial losses to the affected users, but it also makes user identification harder for online gambling operators.

Furthermore, the fraud landscape in Brazil is unique, with high rates of attacks: Around 1.5 percent of all transactions in Brazil in 2023 were fraud attempts, a stunningly high number. Document fraud and biometrics fraud make up the largest proportion of overall attacks.

Combine CPF verification with KYC checks

Most online gambling operators in Brazil use CPF numbers to gain insights into the user profiles and verify their identities. However, given the high propensity of CPF numbers to be stolen or compromised, betting platforms cannot solely rely on CPF verification to authenticate users. Performing KYC (Know Your Customer) checks to supplement CPF verification is the right approach to accurately verifying user identities and complying with the mandatory regulations.

A systematic KYC process can protect online gambling platforms from fraudulent activities, while maintaining an optimized gaming experience. By authenticating the identity of users, including document verification and address checks, automated KYC solutions can quickly verify that the users are really who they claim to be, are of appropriate legal age, and are not Politically Exposed Persons (PEP) or listed on any sanction lists. 

KYC also helps gambling operators offer a robust user experience and remain compliant with jurisdiction-specific regulations by protecting minors from underage gambling and screening out restricted persons. Through verification and linking of user identities with their gambling accounts, KYC helps gambling platforms build-in user accountability and discourage them from engaging in fraudulent activities.

The KYC process

The KYC process kicks in as soon as a user tries to create a new digital account on a gambling platform. At this stage the user is asked for identification documents and proof of address for verification purposes. In some cases, financial information may be needed for additional verification.

Users who successfully complete the verification process are allowed to access the gambling platform. Further for easy identification, gambling operators can combine KYC with the CPF verification and assign a unique identification number to each player that associates the players with all the bets they place.

Navigating legal complexities can be onerous

In view of the recent online gambling regulations in Brazil, gambling platforms looking to operate in the country must meet the licensing requirements, which also includes the KYC mandate. Gambling operators must understand that KYC checks are mandatory to prevent money laundering, terrorist financing, and other illicit activities in the country.

Navigating these legal complexities and evolving regulations, can be a daunting task for operators. Therefore, gambling operators must look beyond just CPF and consider partnering with an expert that has the experience and expertise to offer a fully-compliant KYC solution, all while remaining customer-centric.

Hit the ground running with CAF

Given the unique landscape in Brazil, sports betting operators need a unique solution; one that has proven experience in this market. Caf is a Brazil-born and headquartered company, with an expert knowledge of the country’s gambling environment inside out, offering expertise that can help operators quickly hit the ground running. CAF removes the complexities and streamlines the KYC process to make verification user-friendly, seamless, and more accurate. With a combination of the latest technologies – artificial intelligence, machine learning, facial biometrics, optical character recognition, and multi-factor authentication (MFA) – the best-in-class CAF platform delivers automated KYC for unmatched user authentication and faster onboarding, without degrading user experience.  

Gambling operators can benefit from CAF’s superior KYC capabilities powered by cutting-edge solutions, including identity verification, document verification, background checks, CPF consultation, facematch with liveness detection, and continuous monitoring. Additionally, operators can leverage CAF’s iBeta-certified biometric technology, near real-time validation of thousands of unique documents, and the latest threat intelligence from CAF network and ALL.ID, to stop fraudsters before they can abuse their online platforms.

With CAF’s thorough CPF verification and KYC checks, online gambling operators can navigate Brazil’s regulatory landscape with ease to fuel sustainable business growth. To learn how CAF’s fully compliant KYC solution helps balance fraud prevention with user experience and regulatory compliance, book a demo now.

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"Why You Need to Go Beyond Just CPF for Accurate Identity Verification in Brazil"