What is Address Verification?
“Verification is designed to verify the person behind the onboarding and the identity details provided. That the provided information corresponds with the real information.”
Business growth demands scaling, which requires attracting new customers and improving the onboarding procedures. Before onboarding, customers’ identities are verified and so are their ID documents they have provided, including their proof of address. Online address verification is the prerequisite for flawless onboarding. People often fake their address for multiple gains.
In order to identify between the real and fake customers, address verification is carried out. Further on, it is checked if the mentioned address is a valid address by running scans. To do so companies use different online tools to verify addresses.
As per FBI’s Internet Crime Report, that came in 2019, the complaints of internet crimes were 467,361 with losses exceeding 3.5 billion USD. Among these 11,677 were real estate crimes, causing people more that 221 million USD. This shows an increase as per the reported cases of 2017, which were 9,600 with a total loss of 56 million USD.
“Verification of address is a process that verifies the existence of the street and postal address.”
Why Address Verification Has Become Necessary?
There are many situations in which customers ask to prove their address, they can be residential, business, or international addresses, depending on the requirement. For verification a list of documents is provided which can be verified by a person sitting in front of a system in some office or the person using an online address verification system. The verification of address has become necessary to prevent loan, government benefit, healthcare, credit card, deed and other address related frauds.
Verifying an address ensures that data related to the address so far collected is accurate and recent which aids in enhancing brand satisfaction as well as customer experience, reducing extra costs and ensuring data-driven decisions. Digitization has made it much easier to connect with global customers as well as expanding businesses. While dealing with international customers the addresses that need verification are international addresses.
While verifying an address, the majority of the platforms do not accept a doctor office’s invoice or payments carried out for house services; rather they require to provide a document that authenticates employment at the address or continuous living.
Why Use Address Verification Solutions?
Prevention of Frauds
Verifying an address is becoming a business necessity in order to minimize fraudulent activities, may it be a financial or E-commerce sector. The most common fraud that is faced by the rising online businesses is chargeback fraud which on average is 0.60% across all industries. Chargeback frauds cost merchants the most, experiencing 306 fraud transactions per month in 2017. Which rose to a loss of 1.8% of the total revenue in 2018. This does not stop here, credit card frauds also add in with 30% of chargebacks made with stolen credit cards, leading to identity theft.
In order to prevent the businesses from this menace, verifying addresses is the key.
As per the instruction of FATF, all businesses, virtual or non-virtual, require to run identity verification for the security of customers and maintain a trustworthy position of the company. After the enforcement of 6 AMLD by regulatory authorities, it has become necessary to verify the identities of the people businesses are dealing with. Identities can easily be verified by verifying an address ultimately ensuring compliance with the KYC regulations.
It is pretty evident that responsibilities regarding the customer experience are high on online business. They work indirectly from behind the screen. Hence, knowledge of the customer as well as their identity is crucial. Falling under this are the fake deliveries which are sometimes cause intentionally while the rest of the time are result of human error. These have caused retailers an amount of 19.23 USD with 5.6% of orders reaching fake addresses. By using verification of address, records of the customers can be kept, analyzed and ultimately verified. This will help the services in providing fast deliveries and building an effective and less-time consuming communication with the customers.
Companies require or in need to check the official as well as personal documents to ensure authenticity. Due to the shift to online methods. The address verification has got a lot easier, with this the fraudsters have also migrated to the online systems, causing destruction. They can alter the documents as well as make fake documents for their personal gain. Hence, human efforts alone are not enough and need computer algorithms which include AI technologies with 3D recognition features. Which verify addresses within seconds.
Online address verification is indeed a hassle-free solution that provides results within seconds. Has databases of many countries which increases the authenticity. With digitization, fraudsters have become cunning and digitized too, carving ways to create fake identities. Their personal gain and to prevent them from doing. It is important to upgrade the systems and introduce innovative and hard-to-bypass systems. To validate addresses, real-time verification can carried out.