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Almost all of us would have at some point in time applied for a loan or registered for a trading account. Among several other documents that testify who we are, there are two proofs you would most definitely need to submit. One of them is proof of identity (probably a passport) and the other is proof of address. Yet the proof of address for many accounts is either fake or a temporary one where the person no longer may reside. Though a few institutions would accept a temporary address, many don’t. They demand proof of a permanent address.
What is a proof of address?
A proof of address is any document that in a court of law proves that the person is a resident of a given place. This includes in all cases a door or flat number, street address, locality, city and state with postal or ZIP code in the given country. A proof of address in most cases has to be attested by the person who is providing it and must be presented in a readable format without any errors so that no one would question it on grounds of clarity. It must also not be forged or modified, as doing so would definitely bring such an application under the scanner of the authorities. It would invite litigation and future disqualification also from lenders for a period of several months.
In summary, a proof of address document must satisfy the following criteria:
Must be unique: It must be signed with a certain date and time and there must only be one of its kind.
Must be legible and unambiguous: The proof of address must not be ambiguous. It must be easy to understand and also be legible.
Must be certified by a government or acceptable authority: Even rental agreements are made on government paper, the reason being that such authority is necessary to prove the relevance of the proof of address.
The generally accepted proof of address documents are government issued address proof (French national identity card in France, Social security number in USA, or Aadhaar in India), driver’s license, credit union statement (in the UK), receipt of tax invoice, rental agreements or mortgage contracts, utility bills (includes gas, electricity and water), fixed line and broadband internet bills, mobile bills (postpaid) and so on. In certain cases, even the bank statement, social insurance statement, or credit card bill may serve as proof of address.
When certain proof of addresses become non-acceptable
But all is not hunky dory for some of us. We may not get the loan we want or the vehicle we desire for the lack of an address proof that is acceptable. Again this not only depends on government issued guidelines but the specific lender also. There is no one answer to whether the documents may be accepted or not. Some financial institutions in India not only use Aadhaar as a proof of identity but as a permanent address proof as well. They do not accept even a rental agreement. For others, it is possible that a credit card bill statement or a savings bank statement may be unacceptable. Clarify with your lender what documents are acceptable before you begin your journey, in the interest of saving time. Also if the lender makes any suspicious demands when it comes to the documentation, make sure that you are going in for a loan from a government qualified and approved lender only.
The newer proof of address verification processes
The newer proof of address processes (especially those that use government issued address proofs) generally pull the information from a government database and therefore use an OTP or pin-secured method. The user needs to have his mobile or email login handy to ensure that the institution is granted access to the address information pulled from the government database. Some of the newer processes also use OCR (optical character recognition) to scan the uploaded address proof in real-time without having to depend on a person to perform the verification. The OCR from HyperVerge is very accurate as the AI models are regularly updated and benchmarking is done against the competition. HyperVerge, with its HyperTuring Engine, is uniquely placed not just to provide OCR to make the customer onboarding journey easier but also face recognition that generates a match in a matter of seconds based on the selfie of the customer. If you are a lender looking to improve the identity verification techniques on your application or website, talk to HyperVerge.
Why is a proof of address necessary?
Organizations generally request a proof of address when they need to ensure that the person is a resident of a particular location in a fixed country. Generally, the lender provides service to just that country in question, so zooming in on a certain location allows the lender an easier contact process with the customer for the purpose of recovery. It also allows deeper insight into the capabilities of the customer, especially the income profile, as people belonging to a certain income group are generally clustered in a particular area. Apart from the ease of contact and the greater visibility, it also increases the effort that fraudsters need to gain access to a loan. They cannot now just get a loan by using another person’s ID alone to gain access. Now they would have to get hold of the address proof or duplicate that as well. This adds an additional layer of fraud protection.
Now let’s take a look at the actual process of submission and what the best practices are that one can follow when it comes to proof of address documents.
Most recent address proof only: Depending on the requirements of the lender, any proof of address document must be the most recent one. For a rental agreement, the last updated one, for a utility bill, that which belongs to the current month, and so on. Generally the lender will specify how recent an address proof they want.
Maintain a single version of the document: Maintain a single version and copy of the document. Do not modify the document digitally at a later stage to correct errors. In case of any errors, reapply for the proof again.
Mention date and signatory clearly: Any address proof that is submitted must show the date of issue very clearly. The signatory and the name of the issuing authority must also be mentioned clearly. This is because there would be an additional layer of verification, either manual or OCR. If such things are not mentioned clearly, then it would affect the accuracy of the gathered information or even lead to rejection.
Mention address accurately: Make sure you do not make any approximations in the address. The nearest house or landmark serves its purpose but must not mark the actual residence itself. But add a landmark definitely, in case there is some kind of in-person verification that will happen later.
Other languages may be accepted, but English helps: Submitting an address proof in English would help a lot with the detection of characters by the OCR. Getting it done in another language would not help in the case of manual verification, if the verifying person does not understand the other language.
Problems with proof of address documents
Yet despite these best practices being cited by the lenders and others, it is possible that the proof of address documents may have some issues. Some of the problems with proof of address documents are:
Not enough clarity: The proof of address document may not mention the address clearly or completely. No one may be present at the address that is mentioned as the residence address.
Interchanging permanent and temporary addresses: Sometimes, the permanent and temporary addresses can get interchanged. When this happens in-person verification is affected and the application can get rejected too.
Disparity in proof of address document: There may be several disparities in the proof of address document for the same address when the document is submitted at later dates. So maintain a single format for every proof of address document, especially the rental agreements that you submit.
Lack of trusted signatories: Sometimes the documents need witnesses to attest to its authenticity. Sometimes such witnesses are not present when the document is made and are added later. This also may lead to a problem with proof of address verification.
Language used is not clear or mixed up with another language: Sometimes, the language that is used in the proof of address document is not a single one, but a combination of two. Sometimes it is not clear and other times it is not an accepted language.
Make sure it is before you submit the proof of address.
How HyperVerge can help with OCR
HyperVerge has a solution for OCR which will greatly reduce the time it takes to onboard the customer. This is because the AI behind the engine is so accurate that it recognizes the characters across several languages and in varyingly skewed approximations of the actual ones. The AI is continuously trained and is also benchmarked against competitors to ensure that the OCR quality is always top notch. The false-positive and the false-negative rates are very low for HyperVerge. This means that fewer rejections or incorrect approvals happen because of low lighting, network connectivity, or even lack of legibility.
Closing words
HyperVerge has been at the forefront of OCR for a very long time and has seen the technology that it uses become the trusty sidekick that it is today. Today more and more lenders are using the OCR solution from HyperVerge to make the customer onboarding process more refreshing for the customer and an easy one to manage for the lender. When will you be HyperVerge ready? Talk to us today, dear lender.
FAQs
What is also counted as a proof of address in addition to the government issued ones?
Water bill, electricity bill, or internet bill are the additional proof of address documents sometimes issued by a private entity.
How many proof of address documents are required for a single application?
Unless there is any discrepancy in the document that is submitted, generally only one proof of address document is required at a time by your lender.
How many times can the proof of address document be submitted?
The proof of address document can be submitted as many times as the lender accepts it. Generally when a proof of address is rejected, the person has to reapply again. The entire application process starts from scratch.
What would happen in case of a proof of address mismatch?
In case of a proof of address mismatch, the customer loan application may be rejected. Once approved, if there is a mismatch, then this will affect recovery and consequently the customer’s credit score when he refuses to pay.
