Proof Of Income – How to Efficiently Undermine Your Customer’s Financial Situation?

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. 

What is Proof of Income?

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.

Why the Need for Income Document Verification?

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. 

The Process of Income Document Verification

What are the Income Verification Documents Required for Identity Proof?

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: 

1. Pay stubs
2. Bank statements
3. Tax returns
4. The social security award letter
5. Wages statement
6. Tax statements

The process: 

• The user is asked to upload the supporting documents such as the passport, ID cards, and driving license. From which OCR or ICR software extracts text and stores it in the back end.
• The software then asks the user to upload the documents that need document verification.
• The user is then mandated to upload a selfie holding the documents, and then the verification begins.
• The document verification services verify the person’s name, age, and other details of the person from the supporting documents with the name on the documents that need to be verified.
• Once these verifications are performed, the software then checks the authenticity of the documents, such as the holograms, inks, and prints.
• The picture from the passport or the ID card is verified with the selfie clicked. Then, deep fakes, in-depth analysis, skin texture, and other details of the pictures are analyzed and then authenticated.
• The income verification documents are then thoroughly checked if there is any tampering in the documents, such as if the name or other minor details are changed. The authenticity of the document is also checked to ensure that fraudsters cannot bypass the identity verification system
• It is further ensured that the income verification documents that are provided are not more than three months old to ensure that the individual is getting paid regularly and is not unemployed to be deemed unfit for the applications.

The process of document verification does not take a lot of time and can be performed in a flash. 

Summing It Up

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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