Proof of Address (PoA)

Proof of address can be the following documents:

• Utility bills, such as electricity, gas, water, or internet bill
• Driver’s license, national ID, or state ID 
• Social insurance statement
• Government-issued house rental agreement
• Bank or credit card statement
• Employment letter
• House purchase deed
• Tax bill

Banks, crypto platforms, and other regulated entities must ensure that only acceptable proof of address documents are verified. 

Documents that don’t meet the criteria and can’t be counted as PoA include:

• Mobile phone bills
• Insurance and pension documents
• Invoices for purchasing goods or services
• Any sort of handwritten bills or statements

Proof of address is considered to be a part of the identity verification process and is also often required to be submitted during the user’s onboarding process. It’s also referred to as the address verification process for both individuals (Know Your Customer or KYC) and corporate clients (Know Your Business or KYB). 

There are several reasons why proof of address checks are important for companies. One of the main factors is security and compliance. 

Other examples include:

• Fraud prevention. Bad actors can use shell companies and fictitious addresses that exist only on paper to launder funds.  By verifying PoA, companies minimize fraudulent transactions. 
• Shipping address confirmation. PoA acts as a measure to check if the customer has entered a valid address. For e-commerce platforms, this helps minimize errors and save costs.
• Not only KYC/KYB but also AML compliance. By acquiring and verifying customer address data, companies comply with anti-money laundering (AML) regulations and avoid accepting users from blacklisted regions, sanctioned entities, as well as other high-risk individuals like politically exposed persons (PEPs).

Online proof of address verification is powered by optical character recognition (OCR) technology, which collects, extracts, and verifies the person’s address, ensuring that the information is authentic and hasn’t been tampered with. 

The process typically consists of the following steps:

• The customer uploads proof of address. 
• The system extracts address information.
• The extracted data is compared with other information, such as an already uploaded government-issued ID or a relevant database, possibly with a manual compliance team’s checks for approval. 
• If the data matches, the customer’s address is approved, and they are verified. 

It depends on the company and its internal risk assessment. Sometimes, partial matches and mismatches can be treated with the mentioned extra manual review or declining the customer’s application altogether. 

A traditional approach to proof of address verification means that no software is used and that the check is conducted manually.

Companies often ask customers to provide a proof of address document, which should be different from their proof of identity (such as a government-issued ID). 

The process can be completed in a few steps:

• Inspecting the PoA document for signs of forgery.
• Checking if the document is still valid.
• Confirming that the document has the person’s full name. 
• Verifying that the address is complete and legitimate. 
• If some data is missing, the customer is contacted and asked to provide additional data.