Small and medium-sized businesses are being urged to tighten their recruitment checks as new research reveals a sharp rise in AI-driven CV fraud — with SMEs among the most exposed.
According to a study commissioned by degree verification provider Hedd (Higher Education Degree Datacheck), part of Jisc, over two-thirds (67%) of large companies reported a surge in fraudulent job applications, fuelled by generative AI tools that fabricate or embellish academic and work credentials.
However, awareness appears to lag among smaller firms. Just 37% of small businesses recognised AI as a contributing factor in increased CV fraud, compared to 64% of medium-sized employers — raising concerns that many SMEs may be underestimating the risk or lack proper detection tools.
Qualification fraud — including falsely claiming a degree or inflating grades — is a growing threat. While 45% of large organisations said they had caught candidates lying about their academic background, only 20% of small businesses reported similar discoveries, suggesting that such cases may be going unnoticed due to weak verification practices.
The disparity in checks is stark. Only 29% of small firms say they verify all qualifications, and over a quarter (26%) admit to checking none at all. By contrast, more than half (52%) of large companies conduct full verification of academic credentials.
Chris Rea, who leads Hedd’s qualification fraud service, warned that relying on physical or digital certificates alone is no longer sufficient. “AI is changing the hiring landscape,” he said. “It offers benefits, but it also makes it easier for dishonest applicants to create convincing fake CVs and forged qualifications.”
With tens of thousands of recent graduates entering a competitive job market, Hedd is urging SMEs to integrate qualification checks into their standard recruitment policies — particularly given that each new hire in a small business can have a disproportionately large impact.
The findings follow earlier research from Prospects (also part of Jisc), which revealed that 43% of students are using AI to edit CVs and cover letters, and 35% use it to create job applications from scratch. A further 26% are using AI to answer application form questions — making it even harder for recruiters to distinguish between genuine and fabricated submissions.
Despite the growing risks, only 39% of small firms use secure methods — such as contacting the awarding institution, using a background screening agency, or employing a qualification verification platform — to validate applicant credentials. This figure rises to 76% among medium-sized businesses and 85% among large employers.
Rea added: “Qualification fraud isn’t just a problem for big corporations. Hiring someone with false credentials can lead to serious compliance issues, reputational harm and even financial loss. For SMEs, who often operate with leaner teams and smaller margins, the consequences can be particularly damaging.”
Hedd recommends that SMEs use services like hedd.ac.uk or partner with reputable background screening providers to ensure academic qualifications are legitimate — and urges small businesses to audit their current recruitment practices before the next hiring cycle begins.
Read more:
SMEs warned as AI drives rise in CV fraud