Providing proof of income is essential to establish and verify the origins of the funds generated for effective KYC compliance. It is also necessary to reveal the assets or funds before building business relationships between a company and its clients to perform transactions on behalf of the client. For instance, the sum of the amount being invested or deposited).
In such situations, it is essential to verify the income of some clients, and it may not be crucial in others.
Proof of income is mainly deemed essential for the process of Enhanced Due Diligence (EDD), for instance, when a client wants to transfer a transaction that sums up to be a significant amount. The goal is to make sure that the motive between the company and the clients and their necessary transactions aligns with what the customer is expected to do, considering their situations.
Proof of income is the income verification document required or mandated to determine the individual’s income to acquire services such as loans or mortgages. On the other hand, proof of income can be used by lenders or landlords as an identity document verification. Individuals can obtain income verification documents from their desired companies by asking their team leads.
The world is facing multiple frauds, but the least acknowledged fraud is the proof of income fraud, also known as pay stubs fraud. The fraud involves individuals tampering with the paystubs to acquire mortgages, loans, etc. Additionally, property managers need to ensure that their clients have enough funds to buy housing. Or loan lenders also need to ensure that their customers have a stable income to pay back their loans.
But many people have now adopted techniques to tamper with income verification documents so that they can acquire the services. For example, individuals may use other people’s income statements and present them as their own or change the income details of their own documents and generate fake ones.
Usually, when a company asks for proof of documents, the essential details needed to provide are conveyed by the company or the institute. But one of the easiest ways, which does not even require providing income verification documents, is the proof of income letter. The letter helps companies and businesses determine the person’s income status or employment status.
The supporting documents that can be presented to provide proof of identity document verification are:
The process of document verification does not take a lot of time and can be performed in a flash.
The modern tech world has adopted multiple ways to create frauds, and on the other hand, the digital world has established ways to combat those types of frauds. To combat such frauds, the most ethical and useful solution is to perform identity verification and document verification.
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