How Address Verification Can Help in the Mitigation of Frauds?

Fraud is a deliberate action to device some person by taking his money, information, or other belongings. Usually, frauds are done to get financial benefits or to blackmail someone. All the frauds are illegal practices and the fraudster can be arrested, fined, and jailed for this.

In this updated era, frauds have also been updating. Now fraudsters target online businesses to continue their criminal activities. The mitigation techniques are developing to combat frauds. One of the most effective is address verification.

Address Verification

Every new user that is going to onboard on a business should be verified through his id documents. Address verification is a significant part of identity verification. The address of a person is verified before registering him as a customer. In old times, a business has to arrange meetings with the customer for address validation. But now this method is transforming into an online address verification. This is done through online services by AI-powered software. There is no restriction of language for this software, it can retrieve and confirm address data from all available languages. 

For a trustworthy relationship between business and customer, address data is verified through documents provided by any legitimate authority (public or private).  Cutting edge OCR technology is using by address validation software to extract information from the papers. 

Here is the process of online address verification:

Step 1

The customer is requiring to upload an id document along with a selfie. The data on the document is validating and document verification. Name and dob are extracting from the document for id verification. The document also undergoes authenticity checks where its genuineness is conforming. This is done to demolish attempts of fake or false documents. Fraudsters try to deceive the address verification system by uploading illegitimate documents. But the software is efficient enough to catch any fraudulent attempts. 

Step 2

This is the step where the customer’s address is extracting and verifying. The customer has to upload a document containing a recent address, the document should be issued within the last three months. Utility bills, employee letters, bank statements e.t.c can be using as address proof. Same as the above, the address data is extracting from the image and is converting into the required format.

Some businesses have specified address formats according to their need. But most use the international address format. 

Step 3

The address data is analyzing, confirming, and storing in the database of the business against that customer’s credentials. 

Address Verification Against Frauds

Criminals commit fraud through fake or synthetic identities. By doing so they have minimal chances of getting caught. Authentic data helps law enforcement agencies to catch criminals. Be it a credit card scam or cheque fraud, all can be resisted through verified addresses. Financial institutions and other businesses can safeguard their customers from fraud by using address verification services. With all the customer’s authentic information a business makes a strong barrier against all types of fraud attempts. 

Chargeback frauds are costing huge resources for businesses. According to a report, 86% of chargebacks are fraudulent or friendly fraud. When a customer does not receive his order or a fraudulent transaction happens on his credit card.  The merchant has to return the lost amount to the customer as a chargeback. But when a customer uses this service illegally, he receives the order but issues a chargeback. The reason for this is a false address problem, where customers give incorrect addresses during the checkout process. If the address is accurate, there will be no chargeback. Because now the merchant has the proof that the product is delivering to the right door. 

Summing it Up

Address verification not only reduces the number of frauds but also gives enhanced customer experience. As businesses need to streamline and automate their process. This service eradicates the manual address data entry process by automatically extracting it from the document. The customer service providing processes are more digitized now which will help businesses in larger customer attention. 

Leave a Comment