Fraud poses a big and growing danger for any organisation.
Recent research by Ravelin backs this up by revealing that 75 per cent of businesses globally experienced an increase in online fraud over the last 12 months, with 84 per cent of organisations in the UK confirming growth in online fraud over this timescale – the most of all the countries surveyed.
This is driving many organisations to invest in advanced ID verification technology to protect themselves from fraud and meet Know Your Customer (KYC) and Anti-Money Laundering (AML) regulatory standards. However, to strengthen their ID verification efforts they need to do more, and the best way is by improving customer contact data quality from the outset.
Why contact data quality is so important
From our experience the quality of contact data is essential to the effectiveness of ID processes, influencing everything from end-to-end fraud prevention to delivering simple ID checks; meaning more advanced and costly techniques, like biometrics and liveness authentication, may not be necessary.
The verification process becomes more reliable when a customer’s contact information, such as name, address, email and phone number, are accurate. With this data ID verification technology can then confidently cross-reference the provided information against official databases or other authoritative sources, without discrepancies that could lead to false positives or negatives.
A growing issue is fraudsters exploiting inaccuracies in contact data to create false identities and manipulate existing ones. By maintaining clean and accurate contact data ID verification systems can more effectively detect suspicious activity and prevent fraud. For example, inconsistencies in a user’s phone or email, or an address linked to multiple identities, could serve as a red flag for additional scrutiny.
Address verification is the cornerstone of contact data quality
Address verification – having a consistently accurate, standardised address – is usually recognised as the foundation of contact data quality. Having access to an up-to-date customer address makes it much easier to match and verify identities across multiple sources.
In fact, verifying the accuracy and legitimacy of an individual’s address should be the first step in any identity related process, with any discrepancies between a claimed address and official records highlighting a potential fraudster.
By catching these discrepancies early ID verification technology can help to alleviate risks, ensuring only legitimate users are granted access to services, protecting both their business and customers from fraud.
Address verification also plays a vital role in regulatory compliance, by ensuring that the address information provided meets KYC and AML regulatory standards.
Phone and email verification
As I’ve already touched on, it’s not all about having an accurate address. The role of phone and email verification is a vital as part of a comprehensive ID verification process, and therefore in preventing fraud. Particularly when it comes to aiding organisations to identify and mitigate possible fraudulent activity early on. Verifying all three contact channels together contributes to enhanced security by filtering out fake or high-risk contact information, improving the accuracy of the ID verification process.
Various factors such as the age and history of the email address, the domain and syntax, and whether the email is temporary are all vital parts of the email verification process. After all, new and poorly formatted email addresses are often tell-tale signs of fraudsters. Additionally, the association of a single email with various accounts could highlight criminal activity. It’s only by checking if an email address exists and works, then examining those elements I’ve already mentioned, that organisations can identify possible high-risk indicators.
Just as important in fraud detection is phone verification. By verifying the type and carrier of the phone number, organisations can spot high risk numbers, such as those linked to VoIP services, which are often used in fraudulent activities.
Checking the validity, activity and geolocation of a phone number also ensures it’s not only functional, but consistent with the user’s claimed location. And like with email, a single phone number linked to multiple accounts can be an indicator of fraudulent behaviour.
Deliver contact data accuracy with autocomplete / lookup tools
Using an autocomplete or lookup service is the best way to obtain accurate customer contact data.
With an address autocomplete tool you have the ability to deliver accurate address data in real-time by providing a properly formatted, correct address at the onboarding stage, when the user starts to input theirs. Tools such as these are essential because around 20 per cent of addresses entered online contain errors; these include spelling mistakes, wrong house numbers, and incorrect postcodes, as well as inaccurate email addresses and phone numbers. This is typically due to errors when typing contact information. Another advantage of the service is the number of keystrokes required when entering an address is cut by up to 81 per cent. This speeds up the onboarding process and improves the whole experience.
Similar technology can be used to deliver first point of contact verification across email and phone, so these important contact datasets can also be verified in real-time.
The success of ID verification technology, and therefore fraud prevention, hinges on the accuracy and quality of customer contact data. Access to such data not only enhances fraud detection, but improves the user experience and operational efficiency. Organisations must make sure that data verification tools are used across address, email and phone, alongside their ID verification technology.
About the Author
Barley Laing is UK Managing Director at Melissa. Barley Laing joined Melissa and set up the UK office in 2014 during an exciting expansion phase of the California headquartered company.
As Managing Director, with 27 years of technology and data industry experience, his role is focused on meeting the data quality and ID/compliance needs for organisations in the UK and worldwide.
The team that Barley heads up provides data consultancy, sales and technical support across their wide range of market leading web services, apps, SaaS and on-premise software solutions. These help organisations to deliver efficient multichannel customer engagement; onboarding; build customer loyalty; optimise organisational efficiency; and deliver data management and ID verification to meet Know your Customer (KYC), Know your Business (KYB) and Anti-Money Laundering (AML) requirements.
Under his leadership Melissa’s UK office has experienced double digit growth over the last six years, including 20% growth in 2022, and 25% in 2023. Over this period Barley has significantly grown the UK client base, which includes: ASOS; BBC; Citi; Family Fund; the Financial Conduct Authority (FCA); the Foreign, Commonwealth & Development Office; GCHQ; GSK; Lambeth Council; Mars; P&G and Visa.
