Using Address Verification to Foil the Bad Guys
Melissa Team | |
How an Accounts Payable Company used Data Verification Services to Ward off Transaction Fraud
Fraud prevention relies heavily on how quickly and confidently an organization can determine the customer is who they say they are – a process that’s easier said than done. In fact, 84% of businesses have fallen victim to fraud. Implementing a process to identify your customer is integral to protecting your organization, yet extremely challenging. Imagine trying to take this a step further to verify your customer’s customer. That’s the grueling task that one accounts payable company was up against. The company turned to Melissa’s Global Address Verification for help. Here is their story.
This company offers accounts payable services for other large organizations worldwide. It automates invoice collection, processing, supplier onboarding and global payments – all functions that are highly susceptible to fraud. The company recognized this early on, and determined that financial fraud prevention was a necessity for both itself and its customers.
“We wanted to know ahead of time if any suppliers are giving us invoices with addresses from known fraudsters, or from countries known to be fraud-prone,” the company told us. “We needed a system to validate addresses.”
Faulty Content Information Opens the Fraud Door
Some 20% of addresses entered online contain errors, including spelling mistakes, wrong house numbers, incorrect postal codes, and formatting errors that don’t comply with a country’s postal regulations. Verifying international addresses is even tougher, with a multitude of formats and number of fields varying from country to country. Additionally, verifying address data from around the globe means you must have a centralized reference database for hundreds of countries.
It’s easy to see that for billing and paying, faulty address verification is a critical issue in its own right, potentially resulting in mismatched billing addresses and payment mistakes and delays.
But it goes beyond that. Without adequate address verification, the true identity of fraudsters can be hidden, especially when a company is dealing with multiple addresses in unfamiliar formats. A wide variety of countries are identified by the US State Department as being prone to money laundering and tolerant of suspicious transactions. Companies must verify that addresses are not from known criminals, and need to provide extra screening of addresses from geographic areas of concern.
A Proven Authentication Technology
This accounts payable company adopted Melissa’s Global Address Verification service as a solution for these issues. Global Address Verification authenticates and corrects addresses in more than 240 countries in real-time. The service also formats and standardizes the addresses to that of a specific postal authority’s regulations (for example, the U.S. Postal Service) in a mailing label or database storage format.
By leveraging the power of data sets and the internet, companies can identify a suspicious person by linking a name with a variety of other verifying data. This can involve matching names with phone numbers, addresses and emails. If there are mismatches—and in particular if names and addresses are listed on caution lists—red flags are raised and a company can then suspend financial relations with suspicious persons until more information in acquired.
In the real world, our company under discussion avoided a large part of the fraudulent financial activity on behalf of its clients. As for ROI, how can you measure happier customers who don’t experience the problems they might have encountered otherwise? The company tells us that they’re very happy with this extra level of security, and that their customers don’t have to worry about accounts payable issues from ersatz players with shady backgrounds.