Before a customer is onboarded to a business’ website, the address verification process must be completed. To make a purchase, online companies and financial institutions require users to go through this procedure. Since address may be used to hack someone’s information in a variety of ways, these companies either employ in-house address authentication programs or outsource this work to third-party address validation service providers.
Correlation Between Address Information and ID Fraud?
Bank Accounts
If a person’s address is stolen, offenders may use this genuine piece of information to create a fake identity based on it. They can use that persona to open a bank account. Then, if the account becomes involved in illegal acts such as money laundering or terror funding, law enforcement officials will be unable to identify the true suspect because a stolen profile was utilized. Furthermore, the victim is adversely affected because they must demonstrate to the police how their personal details were hacked.
Fraudulent Organizations
Deceptive actors will often claim a victim’s robbed address for their own illegal company. Nowadays, if anyone wishes to transact with a financial institution, they must provide a current and correct address. When criminal networks lack a genuine and valid address, they take someone’s address and exploit it to seem legitimate to financial institutions. Criminals would not be able to walk away with this illegal conduct if the institution employs a business address verification system.
Mailbox Crime
Theft of a victim’s address for the purpose of committing identity fraud is known as mailbox identity theft. Criminals may ask for a change of address at the post office if they get in possession of your letters. The perpetrator will then receive your mail at the given address. Also, this could expose your personal details to more risk. That being said, if the post office uses an AI-based address validation service to verify consumers’ identities, this kind of deception can be conveniently avoided.
Most Vulnerable Industries to Address Fraud
The address is a critical component of a comprehensive identity record. Any person or company cannot be fully investigated and checked without their address. There aren’t many companies these days that don’t need address details and eventual authentication. Financial institutions and online businesses, for example, are among the sectors that need the address validation services the most.
Online Stores
Corporations are transitioning to virtual space in the wake of the Coronavirus epidemic. It’s because of the market’s requirement and the ease of carrying out business activities electronically. However, in addition to the simplicity, a few obstacles make it tough for online companies. One of these stumbling blocks is remote address validation.
Packages may be sent to the incorrect addresses if companies do not check the consumer’s address. Since incorrectly shipped packages are returned to you at your charge, your organization is placed under undue financial strain. As a result, address validation solutions reduce the chance of erroneous or bogus addresses while also speeding up the online ordering cycle.
Financial Institutions
It is fair to assume that financial institutions are the most vulnerable to identity-related theft. When perpetrators use hacked documents to build false identities in order to open bank accounts, the company must deal with the repercussions of allowing malicious individuals into the financial sector. These institutions will be in gross breach of KYC/AML legislation if anything occurs. As a result, regulators penalize these banks for failing to adequately check their clients’ identities.
Furthermore, as the institution processes illegal transactions, it is required to issue compulsory refunds, also defined as chargebacks, to the targets of identity theft. As a consequence, these institutions must pay non-compliance penalties as well as chargebacks. Therefore, avoiding these issues is certainly a no-brainer for financial institutions.
In Conclusion
ID and address validation have become important in this digital age, where crime tactics are being perfected by every moment. Businesses and financial firms cannot continue to ignore the implications of failing to verify the address of their customers. Hence, address verification systems are a cost-effective and dependable solution that can be very beneficial to these businesses.