Check and Double Check Customer Identities
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How Companies can use Technology and Multiple Sources to Properly Identify Customers and Head Off Illegalities
Are you really who you say you are? Well, you may think so, but lots of other important people may not be so sure.
For many companies, taking a person’s identity at face value and without double or triple checking could be disastrous, which is why it’s so necessary for companies to use multiple sources of identity verification.
Thorough identity checking is essential for any business that must rely on knowing who their customers really are. Fraud is an obvious danger in any business transaction, but is a particularly crucial problem in the financial services industry. Verifying customer identity is central to the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act). The act’s rules specifically note that name and residential address should be verified using reliable electronic data from at least two separate sources, backed up by date-of-birth verification.
Other companies that take orders, provide refunds, or replace any item on request—especially online—can easily be defrauded unless they have in place a rigorous way to check a person’s real, authentic identity. And of course, proper identification is important in acquiring and using a credit card.
In the health care industry, patient identification can be a life-or-death situation—John Jones isn’t allergic to penicillin but Jan Jones definitely is, and … uh oh!
For those companies that bother (or are required) to verify who you say you are, multiple matching sources can help assure that potential customers are probably legit, and not part of a skeezy scam or international terrorist group.
Gaining the 2+2 Edge
I like to call this extreme vetting “2+2” identity checking, which conceivably could entail using four separate means of verifying who a person really is. Rather than checking against one credit file, for example, a business could check multiple sources to assure that name, address, and data of birth (for example) match on at least two or more of those sources.
What sources are we talking about? Well, there are various types of issued credit, as well as records maintained by the government, telecommunications records, property records, utility bills, and so forth. Importantly, a vast array of information is available to companies in today’s electronic-data world, literally at their fingertips.
The burning question is, how to access it? The answer is technology.
Melissa’s Personator Confirm product verifies names, postal and email addresses, and phone numbers in real-time as soon at it’s entered into a company’s database. It’s capable of validating a name and match it to a valid address—employing two good sources—for a simple and quick identify verification. It can also update the addresses of U.S. and Canadian customers who have moved, an important consideration in case a new address doesn’t match what’s on record elsewhere.
Sometimes identities can get mixed up through simple everyday carelessness, either by the customer himself or by data entry personnel. This could cause identify verification headaches for both the customer as well as any new company she’s dealing with. Melissa’s MatchUp product uses advanced “fuzzy matching” algorithms and deep domain knowledge of contact data to identify duplicates.
Through other Melissa products, you can even match a new customer with all the social platforms they use, matched to specific email addresses. Besides offering an obvious marketing opportunity to companies, this provides yet one more electronic data source for your “2+2” identify verification processes.
Heading Off Fraud Via Technology
There are many great examples of how multiple-sourced identification can help companies, in particular on Melissa’s case study page. One of my favorite examples is Z1 Autosports in Atlanta, which supplies high-performance auto parts. The company had suffered nearly a quarter of a million dollars in fraudulent chargebacks yearly, from customers who received Z1 products, then disputed the credit card charge with their bank and kept the product anyway.
Manual checks by the sales staff couldn’t adequately help. Enter technology.
Melissa products provided an all-in-one contact checking, verification, and move-update solution, verifying names, addresses, phone numbers, and email against multiple valid electronic sources. The technology also provided to the company accurate real estate and property data. By nailing down building information, property owner identification, owner mail address and more, Z1 was able to connect customer names with legitimate billing and shipping addresses.
Any red flags were seen in real times, and the fraudulent transaction could be nipped in the bud.
The results? That $250,000 in annual chargeback losses was reduced by more than 90 percent, and labor costs from manually verifying customer identifies virtually disappeared.
So consider “2+2” multiple-sourced identify verification for your company. It’ll save you time, money, fines from regulators, and lawsuits. Just as importantly, you’ll sleep better at night.