SMEs are being urged to review their recruitment practices, as new research reveals that AI-driven CV fraud is on the rise, and small businesses may be particularly vulnerable.

Degree verification and fraud service provider, Hedd, part of Jisc, commissioned YouGov to poll more than 500 HR decision makers. The majority (67%) of large companies reported an increase in job application fraud, attributing the trend to AI tools being used to enhance or fabricate experience or qualifications, but smaller businesses were significantly less likely to agree.

Just 37% of small firms thought AI had contributed to increased CV falsification, compared to 64% of medium-sized businesses. Experts warn this could reflect a lack of awareness or underdeveloped detection practices, rather than a true difference in applicant behaviour.

With 45% of large companies discovering that a job applicant had provided false information about their academic background, compared to 20% of small businesses and 42% of medium-sized firms, qualification fraud may be slipping through the cracks.

Only 29% of small businesses and 37% of medium-sized firms said they verify all qualifications, compared to 52% of large employers. Worryingly, more than a quarter (26%) of small businesses do not check any qualifications at all.

The findings come as thousands of new graduates apply for roles in a competitive market. Hedd is warning that many businesses may not realise their verification processes are insufficient to combat qualification fraud, which could include claiming a degree that wasn’t earned or inflating grades.

Simply asking to see a paper or digital qualification certificate is not enough. The only reliable way to confirm a qualification is to verify it directly with the awarding institution, through a verification service such as hedd.ac.uk, or via a background screening agency.

Despite the risks, just 39% of small firms currently validate qualification authenticity by either checking with the university/education provider, using a background screening agency or qualification verification platform. This compares to 85% of large organisations and 76% of medium-sized businesses.

This research builds on previous findings from Prospects, part of Jisc Student Services. It found that AI tools are playing a major role in improving and crafting job applications with 43% of students using AI for editing a CV or cover letter, 35% for writing a CV or cover letter from scratch and 26% for answering questions in application forms.

Hedd is calling on SMEs to review their recruitment policies and build qualification checks into their standard hiring procedures.

Chris Rea leads the Hedd qualification fraud service. He said: “AI is changing the hiring landscape and while it offers benefits, it also makes it easier for dishonest applicants to fake CVs and qualifications that look convincing.

“SMEs often don’t have dedicated HR teams or formal background checks in place, but that’s why having a simple, secure verification process is so important. Relying on certificates alone isn’t enough, they can be forged or altered. We urge SMEs to protect themselves by checking qualifications directly with the awarding institution, using a secure verification service like hedd.ac.uk, or working with a reputable background screening provider.

“Qualification fraud is not just a problem for large corporations. Hiring someone with false credentials can lead to reputational damage, compliance risks, and financial loss, particularly for smaller firms where each hire carries more weight.”