To spot a fake bank statement, run three tests. Check the sums. The money in and out must take the opening balance to the closing one. Then check the file itself. Last, compare it with other proof. Good sources are filed accounts, invoices and a fresh copy from the bank. One odd sign is a question to ask.
Test 1: the maths
A person who edits a PDF may change one number and forget the rest. So start with sums.
Add up the money in and the money out, then check that the closing balance follows. After that, walk down the running balance line by line. Each balance should equal the one above it, plus or minus the amount. If the statement has page totals, check those too.
Next, check the dates. They should run in order, and one page should lead into the next. Some payments, such as Bacs credits in the UK, do not settle at the weekend. A Bacs credit dated on a Sunday is worth a question.
Last, check the page numbers. A statement that jumps from page 2 to page 4 has lost a page. The lost page might be the bad one.
Test 2: the file
Open the PDF properties and look at who made the file and when. A statement from a bank usually shows the bank's own software. A photo editor or a web tool is a flag. So is an edit date weeks after the statement ends.
I think this test is useful but easy to trust too much. Banks make PDFs in many ways. A scan or a phone photo has no useful properties at all. And a clean file does not prove a statement is real. A careful forger can fix those too.
Then look at the page. Fonts that change mid line are a sign of a patch. So are columns that sit a little off, and a logo that is blurry next to sharp text. Check the details that the bank controls. The sort code should belong to the bank named on the page. An IBAN has check digits that code can test. The account should be in the name of the applicant. A name that looks close is not enough.
Test 3: the other proof
This is the strongest test. A forger controls the statement, but not the rest of your file.
Compare the money in with the sales in the filed accounts and the VAT returns. Then check it against the invoices. They do not need to match to the pound, but the size and the trend should agree. Take the five biggest credits. Ask which invoice or customer each one belongs to. Then check the regular costs, such as rent, wages and loan payments, against the list of debts. A loan that is in the application but not on the statement is a gap.
Also watch for credits that look like sales but are not. Money moved in from the owner's other account makes sales look bigger. So does a loan from a director. Ask if any money came from the owner's other accounts. Ask why the balance is high on the last day.
What to ask for
When the file does not add up, ask for something that is hard to fake. Name the exact date or payment, so the applicant sees it is a normal check.
- A fresh statement from online banking. It should cover the full period, with every page.
- A read-only bank link, if your process allows it.
- A statement or note sent by the bank itself.
- A short reason for any large or round credit.
Keep the first file. Write down what did not match, what you asked and what settled it. Then anyone who opens the file later sees the same story.
Red flags in one place
- A closing balance that does not follow from the lines above it.
- Missing pages, or the same payment twice.
- A file made in an editor, or changed after the end date.
- Credits that are round, that repeat or that have no invoice behind them.
- A balance that jumps just before the period ends.
- An account holder name or sort code that does not fit.
A worked example
This is an example with made-up numbers. It is not a real file.
A statement shows an opening balance of £18,420.55. Money in is £61,300.00 and money out is £55,982.10. Those figures give a closing balance of £23,738.45, but the last page prints £27,738.45. The statement is £4,000.00 too high.
That does not prove fraud. A page might be missing, or a line might be misread. So the credit team writes to the applicant and names the gap. They ask for a fresh copy of the same period. The new copy shows a £4,000.00 payment from a customer that the first one left out. Now there is an answer to weigh, and a person decides if it is enough.
What can and cannot be automated
Software is good at the first test and part of the second. It can read the statement into rows and add them up. It can check the running balance, test the IBAN and read the file properties. It can flag repeat lines and match large credits to invoices. That work is slow for a person and quick for software.
Software cannot tell you if an answer is honest. It also cannot tell you that a clean file is real. Those calls belong to someone on the credit team.
Klarefi is the intake step that fits here. It reads the statements. It asks the applicant for a missing page while they are still there. It links every figure to the line it came from. It does not score the file or decide. Your own checks run on the facts, and a person looks at anything that fails.
Use the document checklist for the rest of the file. Our guide to loan software has more on the wider process.