What is the Address Verification Process?

Address verification process is a systematic approach used by companies, governments, and organisations to verify an individual’s residence address. 

This process is critical for businesses that need to verify the legitimacy of client information for billing, regulatory compliance, or identity fraud prevention.

Address verification, at its core, entails cross-referencing the proof of address with a reliable database or employing paperwork to certify that an individual or entity is situated at the specified address.

In practice, the address verification process looks like as follows:

1. Address Data Collection: Individuals input their address details via online forms or applications
2. Evidence of Address Submission: Individuals generally upload a digital copy of a utility bill or bank account statement as evidence of address
3. Verification: The organization checks addresses against postal service records using software or physically reviewing documentation to assure accuracy
4. Confirmation or Rejection: After verification, the address is either confirmed or the individual is prompted to submit additional information if there are differences

Now a question arises. When should companies verify their client address? Let’s see below.

 

When Should Companies Verify a Client’s Address?

Companies should verify a user’s address to demonstrate the correctness of client proof of address. 

Here are some circumstances in which address verification is important –

1. Customer onboarding

During the KYC (Know Your Customer) procedure for new customers in banking, financial services, and telecommunications, it is common practice to verify their address.

2. Financial transactions

Verify the address while processing financial transactions, especially those involving credit or big funds, to prevent fraud and money laundering.

3. Online transactions

E-commerce enterprises should verify addresses to prevent missed shipments and fraud.

4. Regulatory Compliance 

Companies must do due diligence, such as address verification, to meet AML and other regulatory criteria.

5. Fraud Prevention

Address verification protects both businesses and customers from identity theft and payment fraud.  

6. Legal Services

Verify persons’ addresses to ensure appropriate service of legal notices and documents.

 

Now, let’s see what documents can an individual provide as a proof of address.

 

What is Proof of Address?

Proof of Address is evidence that a person’s physical address matches their reported address. The true address must exist, and there must be evidence that the individual is currently residing there. Billing statements from authorized organisations sent to the same address can establish the person resides there.

There are various options for providing location documentation, including a proof of residency letter. The most frequent technique to show location is to provide documentation that include the address, dates of service, and the person’s name on the account.

Each organisation has different requirements for acceptable Proof of Address documents, but common examples include:

• Utility bills with clearly printed name and address are commonly accepted as proof of address. Examples include power, water, gas, and landline phone bills.

• Monthly bank statements or official letters with your residence address are valid proof of address for many purposes. 
• Government-Issued Letters: Tax statements, social security letters, and voter registration cards are commonly used as verification of address.
• Signed lease or rental agreement serves as legal proof of address, especially when renting a property.
• Mortgage Statement: Many institutions accept a mortgage statement containing your name and address as proof of address.
• Driver’s License or ID Card: A driver’s license or state-issued ID card with your current address may be accepted as evidence of address, especially for renewals or new applications.
• Insurance Documents: Insurance policies, including health, car, and home insurance, can serve as proof of address.
• Employment Documents: Pay stubs, contracts, or official letters from your employer having your address on them may be accepted as proof of address. 
• Recent tax records (e.g., returns or property tax statements) showing your residence address might qualify as proof of address.

In summary, utility bills, bank statements, government-issued letters, leases, driver’s licenses, insurance documents, employment paperwork, student IDs, and tax documents are all acceptable kinds of identification to prove your address. It is important that the document you supply satisfies the exact specifications of the institution or service provider requiring confirmation of address.

 

 

Well, there are some challenges with proof of address documents. Let’s see below.

 

Problems with Proof of Address documents

Improvements to the verification of Address process have been gradual, especially when contrasted to the technological progress made in verification of identity.
Following are some of the recognised Proof of Address difficulties.

1. No proof of address template

Consider how many different services may provide residence proof. With all of the numerous organizations, styles, formats, and content, the issue of identifying the legitimacy and integrity of a residence document becomes evident. Depending on the use case, there could be thousands of possibly acceptable documents with little to no commonality or guiding principles to make decisions on.

2. Poor onboarding experience

A new customer wants to sign up and start utilizing the service right away. They don’t want to start searching through folders for a document, sending it in, scanning it properly, and then waiting for acceptance. 

Part of the problem is a lack of previously stated standards, which causes uncertainty for the client because they have several options. Beyond that, there’s the issue of dealing with paper documents in a digital context. Organizations require customers to become document scanners; any illumination or positioning issues slow down the procedure and aggravate customers even more.

3. Cost of document handling

Aside from the possibility of substantial errors and delayed processes, the expenditures associated with human checks can soon build up. Processing a few dozen applications every month is manageable, but processing hundreds or thousands of applications becomes a large and wasteful chore. Record keeping, rechecks, and other costs associated with document handling must also be considered.

4. Language used is unclear

Proof of address documentation written in a foreign language or in multiple languages can be difficult to get. The verifying party may request a certified translation, which might add time and money to the verification process.

 

We hope this blog helps you get started with address verification. If your business needs help with verifying addresses or identities of the users onboarding to your business, check out Signzy’s Identity Verification solutions.

Thanks for reading!