If you’ve used any digital payment service, you’ve probably needed to verify your identity and provide proof of address.
However, criminals have figured out ways to fake proof of address documents for a low fee. These counterfeits are so similar to the original that only advanced AI-powered tools can detect them.
So, this article discusses proof of address, why it is needed, types of documents used for address verification and how to fight fake proof of address documents.
What is proof of address?
Proof of address is a document that verifies where you live — a proof of residence. The document must show the following:
- Your full name similar to other government-issued documents
- The date of issue (and expiry, if applicable)
- The issuing authority with the corresponding logo
- The specific address of residency.
Banks, payment systems, credit unions and other financial institutions request proof of address as a security measure to confirm that you are not lying about where you live.
Proof of address differs from “proof of identity” in the sense that one confirms your residency while the other proves that you are an actual living entity. Besides, proof of identity documents must have your picture, while a proof of address document mustn’t contain your image.
Why is proof of address a necessity?
Now that you know what qualifies as proof of address, we can explore why it is necessary. But before we dive into the topic, let’s go through some numbers.
A report by the Alte Group estimates potential losses of around 721.3 billion USD from fake proof of address and other identity fraud cases.
According to the U.S. Census Bureau, 14% of the people living in the U.S. move within the country annually. This constant movement of people makes it difficult to track every citizen’s location or residency.
Source: U.S. Census Bureau
Similarly, the Federal Trade Commission received over 2.1 million reports of fraud in 2020 alone. Although most of these fraud cases were related to COVID-19, 53% of respondents still complained about fake proof of address bills.
And this brings us back to the necessity of fake proof of address verification.
- Mitigating risks
The digital world is fraught with fraudulent activity and various forms of identity crimes. As a result, every financial institution, government agency, or payment management platform should mitigate these risks by using proof of address verification.
- Regulations
US citizens must apply for a change of address within 30 days of moving to a different locale. However, countries like Hong Kong don’t mandate that citizens provide proof of address to access services. So, find out the law of the land and abide by them.
What industries need proof of address verification?
As mentioned earlier, financial institutions and government agencies require verification for proof of address documents. But other industries also ask for these documents.
Here they are:
- Banking
When opening an account, no banker will “take your word for it” when it comes to your address. You need to provide a government-issued document that proves your residency.
- Online payment platforms
Payoneer requests documents from users to verify their identity, address, source of income, and business. Without a valid proof of address, you cannot access the services of such online payment platforms.
- Loan platforms
When applying for FHA, VA, USDA, and conventional loans, you need to verify your identity and provide proof of address. These documents help the lending agencies to stop fraud and protect people’s identities.
- Travel
Companies like Airbnb request proof of address documents from customers to verify their identity. These documents help them keep track of homeowners who list fake addresses for their property.
- Government agencies
Visa applicants need to provide bank statements and proof of address to process their applications.
Types of documents used for proof of address
To prove your address, you need a document that verifies your residency and is recognized by the authorities. However, documents like handwritten bills and payment receipts are not proof of address documents.
So, let’s discuss these proof of address documents.
National ID or International passport
National IDs verify your identity and residency in one fell swoop. Both documents are internationally recognized because they are government-issued.
But often, the registered place of residence on the national ID and the bearer’s actual residential addresses are different. That is why companies require other documents for proof of address.
Bank statement
Bank statements are also excellent proof of address documents because they show your registered address on the receipt. Visa applicants and loanees need bank statements to prove their residency.
Utility bill
When you pay for gas, electricity, water, and other utilities, the receipt always shows your address. Even if you own multiple properties, paying for these amenities means that you are the legal occupant.
You can also present your council or municipal tax bill as proof of address for banking services. Ultimately, online payment platforms accept insurance receipts for your car and home since they specify your address.
Driver’s license
The driver’s license is quite tricky. In some countries, you can only prove your identity with a driver’s license and not your address. But since most adults have driver’s licenses, the document is easy to counterfeit.
Residence permit
Just like international passports, resident permits can serve as proof of address since they contain your official residence. Besides, some countries demand residence permits from foreigners since not all international passports contain residential addresses.
Government-issued rental agreement
Homeowners and rental agencies often issue rental agreements. But not every company or government agency accepts these documents without a government stamp or logo.
Problems with fake utility bills and fake bank statements
Of all the proof of address verification methods mentioned above, utility bills and bank statements are the most widely accepted.
However, these documents are now easy to manipulate using advanced digital tools, commonly known as fake utility bill generators. The Internet is full of websites that offer “fake utility bill generator” or “fake utility bill for proof of address”.
How does this fake utility bill generator work?
The utility bill maker generates a document with all the necessary stamps and logos to make it look legit. To the naked eye, these forgeries look legit. But advanced fake utility bill detection engine can spot the discrepancies between genuine and counterfeit documents.
And this same principle applies to using fake bank statements as proof of address. Any fake bank statement generator online can falsify your document instantly and deliver the output in any desired format.
Fake utility bills and bank statements are a great problem for banks and financial institutions. Since the verification process is complicated and no comprehensive data exists on these forgeries, it is very difficult to assess financial losses due to fake proof of address documents.
How does a fake proof of address detector work?
The central focus of the verification exercise is to check if the address on the utility bill is authentic and if the owner actually lives there. So, let’s go through how a typical utility bill verification process works.
Allow your customers to submit their utility bills, bank statements, rent agreements and other types of proof of address documents by scanning or taking a photo of these documents. It is a convenient route:
- For the proof-of-address, the user first captures a picture of a valid document.
- The system checks if the address on the document is not photoshopped or forged (our AI-powered Fake Utility Bill Detector checks popular file formats (PNG, JPEG, PDF, and others) for signs of manipulation).
- The results appear instantly: real or fake.
- No extra steps for you and your customer.
As we explore the rise of fake proof of address verification and the innovative AI-powered and ML-based tools combating it, it’s evident that robust transaction management and stringent financial compliance measures are crucial. Now, let’s check out the SDK.finance’s demo video to explore how SDK.finance provides a comprehensive view and control over client transactions, along with advanced AML and fraud prevention features, empowering institutions to stay ahead in the fight against financial crime:
References:
- How to Nail Proof of Address in Your Address Verification Process
- Anyone Can Forge Utility Bills… This is How You Safely and Accurately Verify Residency – Evident | Automated Verification to Reduce Risk
- Know your customers, and now, know where they are with Veriff – Veriff
- Quick Address Verification services with a free trial
- Direct-From-Source Data Tightens Security and Compliance for Online Gambling ID Verification
- This Type Of Identity Fraud Is Surging: How To Stay Protected
- Another Epidemic: Identity Theft
