When a customer wants to sign up for an account or perform a transaction, they must provide two types of papers to be verified: proof of identity and proof of address (PoA). Companies require these documents to verify one's identification and to comply with local or international legislation.
However, it is not as simple as it appears. Proof of residence forgery has been a major problem over the years. The paperwork is readily changed, and a temporary address has been provided to resemble the real one on several instances.
Documents That Account as Proof of Address
What a firm would accept as a document establishing residence may differ slightly depending on the type of institution or the jurisdiction in which it is located.
Common Residency Proof Documents
- Current financial statements with the date of issue and the person's name (the document must be no older than three months);
- Utility payment for fuel, electricity, water, internet, and other services related to the property (the document must be no older than three months);
- Terms and conditions with the property owner and tenant's signature verification (the document must be no older than three months);
- A credit card bill;
- A letter from a recognized public authority or public worker (any government-issued correspondence that is not more than three months old);
- A letter from the employer attesting to current residency;
- A document for the ownership of a home.
Banks, asset management firms, insurance companies, and other financial institutions are likely to require one of these documents in order to prove the address of their clients. However, there are a few additional choices that can be used as a means of proof of address.
Alternative Proofs of Residence Documents
The following papers can only be considered as legitimate evidence of address only with the condition that they include the address of the related person.
- ID card
- Driver's license
It's important to remember that the same document cannot be used to verify the user's identity and residence. If one of the ID papers has an address, additional supporting documentation will be requested at the time of the identity verification.
Documents That Do Not Account as Proof of Address
Some papers are insufficient to verify that the person's reported address is, in fact, what they say it is.
- Pension statement;
- Bank referencing;
- Insurance company;
- Transfer document;
- Old government-issued communications (older than three months);
- Old bank statement (older than three months);
- Old energy bill related to the property (older than three months);
It's critical to collect these documents correctly. Failure to do so may open the door to fraud and attract regulatory notice, as well as the corresponding fines.
When Do Organizations Request Proof of Address?
Most jurisdictional regulations make it nearly always mandatory to present legitimate proof of residence in order to proceed through the verification procedure. At the same time, such restrictions are essentially obsolete due to the ease with which documents may be falsified and the increasing frequency with which individuals change their residences. Some nations, such as Hong Kong, do not need proof of residency for the reasons stated. Although it will take some time that all rules will ultimately follow this method.
How To Check Proof of Address?
To begin with, every firm that does a proof of address check must have a detailed user guide that explains the procedure and criteria.
- If an automatic check is not possible, there are a few methods to manually verifying residence documents:
- Check for watermarks, security features, and typical patterns of graphics modification;
- Make sure the document has a current issue date (no more than three months for bank accounts, energy bills, and government communications);
- Verify if the paper includes the person's name;
- Check for an address on the paper (the more detailed, the better) and validate its presence using a search engine like Google. Suppose the applicant enters the address without specifying the apartment number while residing in a block of flats. In that case, the compliance officer must ask them to add it as well as the other details of residency.