Here, an indirect DC link current measurement technique is proposed and evaluated in terms of fault detection capability in multiphase converter with highly magnetically coupled inductor and distributed DC link capacitors. The indirect DC link current sensing circuit parameter modification is introduced and the measurement accuracy improvements are assessed in comparison with previously proposed results. A novel approach for converter typical fault detection and identification uses the idea, that the DC link current waveforms are acquired using converter switching functions and hence, reflect the occurring switch faults. Most common converter failure modes are acquired experimentally to analyze their influence on the DC link current waveforms and assess their detection capabilities. The derived fault detection algorithms are verified under different converter operating conditions by evaluating the time needed for failure identification. The proposed method shows adequate phase current measurement accuracy and fault identification capabilities within a reasonable timeframe; therefore, it can be used for current balancing controller implementation, diagnostic purposes and further design of converter fault-tolerant operation modes.