Proof of Address is one of the most important parts of identity verification that is required during the KYC or AML regulatory process. Usually, financial firms and other businesses need documents as proof of address, which is one of the requirements of the customer due diligence and customer identity verification process. Usually, a user needs to verify their identity digitally by taking a selfie and submitting several documents.
Not only this, some companies may conduct an extensive investigation while onboarding a new customer. This additional information may include proof of address documents. However, providing such data may become a challenge for many customers because they are not aware of such documents and how to get them.
Thus, in this blog, we have brought a comprehensive guide to help you understand what is proof of address, how to access it, and why companies require them during the identity verification process.
What is Proof of Address?
As its name denotes, proof of address is a part of the customer identification procedure, in which the client needs to provide documents of the registered address where they live. In other words, it refers to the document that verifies where you reside. It is also known as proof of residency.
The residential proof is typically required by banks or other financial institutions to take security measures and ensure the authenticity of the customer. These organisations try to make sure that they are able to send several documents to your address via post and reach you when needed.
For example, companies ask clients to verify their identity as well as address in order to access specific services, such as opening a bank account. However, during the procedure, proof of address is necessarily required to provide access to these services.
Criteria of Proof of Address
There are particular criteria for providing proof of residential address, which will be accepted by the financial organisation:
- It must contain your current residential address.
- It should be issued with your own ID card.
- There should be a clear date mentioned on the proof of address.
- The document should be sent by a recognised authority along with a proper and registered name, logo, and other information.
Which Documents are Considered Proof of Address?
The requirement for proof of residence documents varies considerably and depends on the industry, business, and region. However, usually, institutions may request documents that could be used as a proof of address letter:
- Authorised change of address form
- Bank reference letter
- Bank statement
- Car or home insurance policy
- Car registration
- Company payslip
- Credit card bill or statement
- Driving licence
- Employment letter
- Government tax letter or municipality bill
- Lease agreement for your residence
- Letter issued by any public authority
- Mortgage statement or contract
- Official letter from an educational institution
- Residence permit
- Utility bills (electricity, water, internet, etc)
Keep in mind that every institution has different requirements when it comes to requesting documents that could be used as proof of address. However, it is recommended to make sure and communicate directly with the bank for clarification.
Nevertheless, financial organisations and other companies that request proof of residence forms generally display an entire list of documents that are acceptable as residential evidence. However, you may need to follow some conditions. For instance, a bank may accept utility bills as proof of address, but they should not be older than three months.
Who Requires Proof of Address and Why?
Well, almost all types of industries, especially financial organisations need proof of address during the client onboarding procedure. However, the sort of proof of address document depends on the customer, region, company, and service. Yet, it is required from opening a simple bank account to withdraw money from casinos.
Requesting proof of residence documents is legal and one of the significant parts of Know Your Customer regulation. Moreover, it is not only implemented in financial companies, but in every business that has high-risk levels of being involved in money laundering, identity theft, or other fraud.
For instance, some gambling platforms, cryptocurrency, and currency exchange firms are all obliged to run KYC measures. In addition, proof of address is a crucial step of customer due diligence to identify whether or not the user is involved in any fraudulent activities and recognise risk levels associated with the client.
How do Companies Run Proof of Address Checks?
The company’s agent first manually reviews the submitted proof of address documents to ensure its authenticity and validity. However, verifying these documents is one of the most difficult parts for companies because some fraudulent clients tend to modify these documents and provide fake information. Yet, this verification procedure includes a few steps:
- Investigating the issuing date of the Proof of Address documents and verifying if it’s valid.
- Checking the customer’s name and surname on the document.
- Recognising and detecting some common fraud patterns through customer monitoring.
- Examining document’s address and verifying its legality through a search engine.
However, other than manual checks, these agents further verify these documents through digital means by verifying proof of address against the database. Yet, digital checks may include online video interactions, where customers need to appear on camera and show and upload required documents in real-time.
On the other hand, a hybrid approach may also be integrated during the KYC process. This technique involves a number of methods such as passive ID verification, which is done through a compatible customer due diligence by analysing the data linked to the client's phone number and email address. This process is useful because it is operated in the background without slowing down the onboarding journey.
When companies acquire outcomes of this process, they make decisions whether to process with the client or they need further investigation to verify their identity.
Proof of Address is an essential aspect of KYC and customer identification procedure, which is required by financial institutions such banks or other businesses for compliance regulatory purposes. Proof of address documents are required to verify where the customer lives and these requirements must meet certain criteria.
However, to verify these documents, financial firms use numerous methods and make client onboarding decisions. Generally, requiring proof of address letter is crucial in the customer due diligence process to prevent industries from onboarding high-risk customers.
Frequently Asked Questions
There are some documents that are not considered adequate to be considered as proof of address. These documents include:
- Bank referencing
- Bank statement (older than three months)
- Insurance company
- Old government-issued letters (older than three months)
- Pension statement
- Transfer document
- Utility bills (older than three months)
Yes! You can provide several documents digitally such as online electronic account statements, mobile bills, and FICO score reporting. However, make sure to submit digital bills that are printable and acceptable as proof of address.