Categories
Verification

Age Verification: Use Cases, Regulations, and Guidelines

Digital age verification is crucial in this day and age. So in this article, we will talk about how age verification works, different rules and regulations, and minor protection in different parts of the world. Almost everyone can get easy access to digital products and services. According to a survey in 2015, almost 1.46 billion consumers purchased goods over the internet. This number increased drastically by 46% since 2021. This can be credited to the COVID-19 Pandemic. In the current situation of the world, more and more people love to purchase products online. While the rising number of online customers is great for online businesses, it also creates challenges.

Today, minors can easily get access to age-restricted content from all over the internet. Unlike the offline world, where minors can’t get access to alcohol or tobacco, buying goods online is completely different. According to research, more than 1 million minors fell prey to ID theft in 2017, which resulted in a $2.6 billion loss.

What Is Online Age Verification?

Online age verification is a process to protect individuals and audiences from consuming non-age-appropriate content. Merchants of age-restricted products need to take responsibility to sell their services only to people over their age. For online businesses, it is essential to understand the age of their users, and digital age verification is a great way to get around it. It is a safe way for minors to perform online activities, and maintain regulatory compliance.

Digital Age Verification vs Manual Age Verification

Since the inception of adult-based services, verifying your age has become a common practice. Tobacco and alcohol stores don’t allow minors to purchase and consume these products. According to regulations by the Food and Drug Administration (DSA), the minimum age for buying and selling tobacco products is 18. These laws can perfectly work in offline stores as there is someone available physically to verify age. When it comes to online stores, verifying the age of an individual becomes challenging. 

So, it makes sense that minor protection rules should also apply to digital businesses. Digital business vendors often just ask for usernames and passwords to protect the users. There’s a huge need for verifying the age of minors before they interact with these platforms. Fortunately, just recently there have been huge developments in the online age verification methods. 

Compared to a couple of years ago, verifying an individual’s age has become relatively easier by relying on biometrics technology. There are several age verification systems available today that rely on AI and Machine learning to smartly identify if the individual behind the screen is minor or grown-up.

How does Digital Age Verification Work?

Age verification helps businesses onboard legitimate customers and prevent minors from using age-restricted processes. Here’s how most age verification processes work:

1. Submit the Date of Birth

The user has to submit date of birth information including date of birth using an online form as provided by the vendor. 

2. Upload Documents

Users upload date of birth documents that are issued by the government. These include documents such as ID documents, driving licenses, or passports.

3. Verification Process

Based on the information provided by the users, businesses verify the age of the users. This happens by using a document verification solution or an online ID verification solution. Based on this verification, the end-user is verified and declined.

Global Age Verification Guidelines

Different geographical locations have different guidelines when it comes to age verification. If there’s one thing similar about all the guidelines, it’s that all of them focus on parental controls. The main purpose is to make parents aware of appropriate services for their children and obtain consent for the children to use these services. 

1. Age Verification in UK

The UK government made some changes in 2017, to make sure that a country is a safe place for children. Following that, some changes have been made to the laws to limit easy access to age-restricted products and services. 

The online age verification provider, interactiveAgeCheck (iAC) is responsible for minor protection. This is backed by CitizenCard, UK’s biggest photo-ID and age verifier organization. It thoroughly considers recommendations made by the UK Council on Child internet safety.

2. Age Verification in Europe

The GDPR (General Data Protection Regulation) is issued by the European Union and applies to the citizens living in EU states. It has a complete set of rules and guidelines for the collection of personal data. This information includes biometrics, health, and genetic information. The GDPR’s Article 8 allows the age of consent to be anywhere between 13-16. This suggests that anyone over the age of 16 in the EU is allowed to consume age-restricted products and services. 

3. Age Verification in USA

The Federal Trade Commission’s minor protection law is named COPPA. It’s one of the most impressive and crucial minor protection laws in the USA. The rule book outlines how companies should collect and verify information related to children under 13. complying with these regulations doesn’t just include age-restricted content warnings, or integrating an age verifier.

The Cellular Telecommunications and Internet Association issued guidelines on restricting career content not suitable for younger audiences. It outlines different content rating standards so that the parents are aware of the type of content suitable for their children. By using internet access control offered by major internet carriers, consumers can limit access to specific websites using filters or block certain websites. 

4. Age Verification in Australia

The Australian Communications and Media Authority (AMCA) put out a new guideline in 2008 to prohibit minors’ access to age-restricted content. These regulations apply to anything aired in Australian media or hosted on TV channels within the country. The broadcasting Services Act of 1992 played a vital role in the development of these frameworks. 

For every content rating group, these rules offer a different set of customer verification, the MA15+ guidelines require:

  • A warning message that the content is MA 15+
  • Safety information for parents to protect their children who are below 15

The RA18+ guidelines contain rules regarding:

  • Warning about the risk of using proof of age by another person or someone who’s not eligible based on their age
  • Consider which evidence is provided, and how it’s presented

Risks of Not Completing Age Verification Checks

There are some risks of not having the age verification methods. These include non-compliance and a drop in market reputation for offline and online businesses at the same time. Generally, the perceived level of risks involved figures out the level of control and application of the regulatory framework.

Here are some risks of not having proper age verification mechanisms in your process:

1. Compromised Market Reputation

Building a great business requires providing customers with the best customer experiences. User satisfaction is crucial in building loyalty for customers and building a good reputation for your brand. Not investing in age verification software can hurt your business by having a negative brand image. Not having a proper age verification process can lead to easy access to age-restricted products and services, it puts minors more at risk. 

2. Non-Compliance fines

All kinds of vendors and organizations have to comply with GDPR, regardless of the type of products and services they offer. The purpose of this regulation is to maintain privacy and secure record-keeping. These regulations are equally important while verifying the age of individuals during onboarding processes. Non-compliance with GDPR can lead to hefty fines for businesses. 

Till 2016, non-compliance fines for COPPA were 160,000, which were later increased to 43,280 dollars.

3. Financial Losses

Online businesses can reduce fraud in chargebacks by parents for non-consenting transactions. Having an age identifier or verification process integrated into your onboarding process can help in reducing financial losses. 

Conclusion: Importance of Age Verification

In the end, the age verification process is crucial to protect the young generation from the adverse effects of age-restricted products and services. Merchants have to take on the social responsibility to secure minors and restrict their access.

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General Verification

What is Signature Verification?

The widespread use of digital signatures has raised tons of questions. Most of these questions are related to user security. Numerous individuals and businesses see the benefit of transitioning from the traditional method of signing documents. The traditional method requires printing, scanning, hand-signing, and re-scanning of the documents and they are a huge security threat. Overall, they’re unsure how the digital signature verification process works.

The solution is to remove the mystery regarding the digital signature verification process.

How do Digital Signatures Work?

The terms digital signature and electronic signature are often used interchangeably, but they are very different from each other. The first point is understanding the difference between electronic and digital signatures. Digital signatures are a type of highly secure electronic signature, and they have a robust verification process. 

eSignature or Electronic signature on the other hand refers to any virtual mark (Like an image file) that is included in a document to signify approval. Digital signatures work by leveraging an encrypted system that is based on a standard technological framework called Public Key Infrastructure (PKI). Certified authorities provide individuals with a digital certificate, which is stored by them mostly on a USB stick. 

Whenever the individual wants to sign a new document, they’ll have to attach their digital signature to the document using special software. An encrypted “hash” that is specific to that document is then created. The individual that’s sending the document then has to match the digital hash with a public digital certificate, in turn verifying the signature. 

Most digital signature providers use a mathematical algorithm to generate digital signature keys. 

  • Public key
  • Private key

Whenever a signer digitally signs a document, a new cryptographic hash is created for the document. This is done to verify the authenticity and integrity of the document. The recipient of the digital document can decrypt the encrypted hash by using the sender’s public key certificate. Once that is done, a new cryptographic hash is created from the receiver’s end.

While verifying digital signatures, both the cryptographic hash are compared to check their authenticity. If the hashes match, the document is original and it hasn’t been tampered with.

The Role of Digital Signatures

Over time, digital signatures have become a norm for all businesses. In many regions, including parts of North America, the European Union, and APAC, digital signatures are considered legally binding and they hold the same value as traditional document signatures.

In addition to digital document signing, they’re also used for financial transactions, email service providers, and software distribution. Digital signatures are crucial in specific industries where authenticity and integrity of digital identity are important. 

Industry-standard technology known as public key infrastructure makes sure to authenticate a digital signature is valid.

Why Should You Use PKI or PGP with Digital Signatures?

Using digital signatures that are supported by PKI or PGP improves their strength and significantly reduces the possibility of security threats. You can reduce security issues that often come along with transmitting public keys, by simply verifying that the key belongs to the sender, and verifying the identity of the sender. Verifying the identity of the sender is crucial when you’re dealing with a digital signature.

The level of security of the digital signature is completely dependent on how secure the private key is. Without PGP or PKI, proving someone’s identity or revoking a compromised key is next to impossible. If the private key is not well protected, it could allow malicious actors to assume the identity of someone else and go through the process without proper verification. 

By relying on third-party verification services, businesses and individuals can verify digital signatures. This can ensure that the digital signatures are not being used by someone who doesn’t have the authority. 

As paperless, and online transactions are growing day by day, the use of digital signatures can help you protect and secure the integrity of your data. By understanding and using digital signatures, you can protect yourself, the information you share, confidential documents, and transactions. 

How are Electronic Signature Verified?

And how are electronic signatures verified? Numerous legislation like the ESIGN (The Electronic Signature in Global and National Commerce Act), UETA (The Uniform Electronic Transactions Act), and eIDAS (Electronic Identification, Authentication and trust Services) offer the validity of electronic signatures. 

The process for verifying electronic signatures is a lot similar to traditional methods that are used to verify physical pen and ink signatures. Verification is essentially about proving an electronic signature was made by the intended signee by verifying the data, location, and time of the signature. This helps in ensuring that the document wasn’t tampered with. 

Categories
Verification

Employment Verification: Step-by-Step Guide

There are several instances where companies will be asked or will initiate a request to verify an individual’s work history and other details associated with their current or past employment. This process is known as “employment verification.”

The hiring process is when most companies do verification of employment, and the process includes professional reference checks. Businesses generally receive proof of employment verification requests from third parties. Lenders who receive loan applications, credit card applications tend to do employee document verification to make sure that the person who’s applying isn’t lying about their employment status.

Mortgage lenders also verify your employment by contacting your employer directly and by reviewing the latest income documentation. The borrower has to sign a form authorizing an employer to share their income information to a lender asking about employment verification. At that point, the lender typically calls the employer to obtain the necessary information. There are some steps that you need to take, but there are steps borrowers need to take if they refuse to verify employment. 

Businesses can use multiple methods to verify employment, including getting a “proof of employment verification” letter, paystubs, contacting references, or executing contracts and agreements. In this article, we’ve mapped out the main reasons for employment verification and how companies fulfill the requests, and why employment verification is important.

What’s Verification of Employment?

To approve mortgages, banks need to verify employment. The same goes for businesses looking to hire new employees, or banks verifying employment before onboarding a customer.

The mortgage lender needs to check that you are employed where you say you’re employed. They also have to take your level of income into consideration. This confirms that the borrower can bear their down payments, EMIs, and closing costs. 

Employment Verification: When is it Required?

Now that online job hunting and professional networking sites like LinkedIn are becoming famous, a CV/Resume is more than enough to verify a person’s employment status. However, many potential verifiers can demand better and more formal certification of employment. This happens mostly when a financial transaction is involved. There are several employment verification documents needed to fulfill the request.

1. Lenders Approving a Loan

Lenders that are reviewing loan applications definitely need to verify an individual’s employment status. This helps them in making sure that the individual can make payments on time. Not just employment, employers can also verify the salary details of an employee if a lender requests so. However, companies should be careful to abide by the local laws. Some locations like the State of California and New York City prohibit employers from divulging salary information during the hiring process, but this doesn’t often affect loan requests. Employment verification methods can differ from business to business, but the end result is similar.

2. Property Owners Issuing a Lease

Similar to loan providers, the employment verification requirements of a property owner are to verify an individual’s employment status to make sure they can make payments under the lease. Financial history is also an important part of completing the process. This can be done by acquiring bank statements from the individual.

3. Employers Hiring New Employees

Before handing out an offer to a new employee, companies often check the employee’s employment history. This is done by contacting the references, which also require formal documentation. This step includes asking for employment verification documents. 

4. Work Visa Holders Verifying Employment

To secure a work visa in a country, applicants are required to have secured a job in the country. Similarly, this is necessary during application renewals, if the individual has quit the job or has been let go, the work visa will diminish. Visa holders must inform the office that issues the work permit if they’ve lost their jobs.

Process of Employment Verification

In general, lenders verbally verify the information borrowers share on the Uniform Residential Loan Application. However, they can also choose to get the data via fax, email, or a combination of any number of methods. Lenders use this information to calculate several metrics to determine how likely a borrower is to repay a loan. A change in employment status can have a huge impact on your borrower’s application. 

1. Additional Information

Whenever a lender will verify employment, a lender will frequently ask other questions as well. The basic question a lender may inquire about is the type of employment. Lenders are also interested in verifying the position, salary, and work history. Most lenders only verify the borrower’s current employment, some lenders may also want to confirm previous employment information. This practice is more common for borrowers who have been in their current organization in less than two years. 

2. Verification for Self-Employed Individuals

Those who are self-employed and take on the mortgage have a different type of employment verification. In this situation, lenders need an Internal Revenue Service (IRS) Form 4506-T. This form is a request for “Transcript of Tax Return” which allows the lenders to receive a copy of the borrower’s tax return directly from the IRS. In a self-employed situation, the lender may also have to ask for attestation by a Certified Public Accountant (CPA) to confirm income.

Common Employment Verification Methods

Companies should notify an existing or a past employee that they’ve received an employment verification request. This allows companies to make sure that the request is legit before providing sensitive details to an unknown party. This is also the first step to learn if you’re wondering how to do employment verification. 

1. PoE Letter

A PoE (Proof of Employment) letter is issued by an employer and it acts as a formal confirmation of a current or past employee’s status. PoE letters often include:

  • Employer’s business name and address 
  • The employee’s job title
  • Dates of the current/past employee’s employment
  • List of employee’s responsibilities
  • The employer’s contact information

2. Paystubs

Pay Stubs are often used for employment verification. It provides a record of an employee’s past income from the company. This information is needed when the individual’s applying for a loan, mortgage, or credit card. In some locales, providing a customer’s salary information is against the rules and regulations. 

3. References

Another method of verifying employment is by contacting the references provided by the individual. A reference can help in providing information about the employee’s roles and responsibilities throughout the organization. The reference (usually a manager) can verify if the individual ever used to work with the organization. 

4. Contracts & Agreements

These documents help in proving an employee’s relationship with a company, but most of the contracts and agreements only show that the employee accepted a job offer. One issue with this method is the lack of surety of the individual working with the organization. 

5. Third-Party Services

Businesses that need employment verification in bulk tend to use third-party services to reduce stress from internal resources. These third-party service providers complete the employment verification process on a company’s behalf.

What Information is Legal to Share?

Employment verification is a tricky process as the entity may require details that an employer is prohibited from submitting. As a matter of fact, employers can face huge penalties if they fail to abide by the rules. Health and Salary information is the most sensitive employee information that most businesses aren’t allowed to share. Here’s a deeper insight into what information is legal to share.

1. Health Data

Sharing information about an employee’s health isn’t legal in most areas. There is no way to know what a verifier wants to do with the information. Health and physical appearance-based discrimination hiring is a common practice.

Sharing information about an employee’s disability is a highly frowned upon practice. According to the Americans with Disabilities Act of 1990, sharing information about an individual’s disability is considered illegal. 

Hiring employers can confirm whether the person they’re hiring will be able to fulfill the responsibilities of the position they’re being considered for. 

2. Salary and Earning History

Certain situations such as loan approval require entities to gain insights into the applicant’s earnings. Several locations such as the State of California and NYC prohibit companies from requesting previous salary information during the hiring process. This rule is set in place to protect an employee from having the salary for a new role being compared to the previous compensation. 

How to Respond to Refusal to Verify Employment?

Some employers completely deny a borrower’s request for employment verification, but it can be easy to fix this situation in some cases. You need to clearly explain to the human resource manager why you need to verify the employment of the borrower. Some companies will not provide any information without the verbal or written consent of the employee. There can also be state laws that a company has to follow before handing out an employee’s information.

As an employee, you should talk to your employer about this. You can also tell your potential mortgage lender about your organization’s rules and regulations. Some lenders may be willing to process an application without employment verification as another state’s law prevents them from verifying a certain type of information. 

There are also some cases where an employer will not verify employment for other reasons. If this clashes with your mortgage application process, then you should start searching for a different job.

Conclusion: Employment Verification

A lot of businesses suffer from employee scams and that’s why it’s essential to verify employee information. In high-risk industries such as the financial industry, employment verification is a need rather than a formality. DIRO online document verification can reduce the verification time by 90% while simultaneously providing court-admissible proof of verification.

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Verification

Best Ways to Reduce Friction During Customer Verification Process

Businesses have to verify hundreds or even thousands of customer identities every single day for several reasons. To reduce frauds of all kinds, e-commerce organizations, banks, hospitals, and other financial institutions have to verify customer identities. 

The most obvious reason for doing customer identity verification is identity fraud. Although a strict customer identity verification process leads to increased friction for the customers.

Poor user experience and tough onboarding can annoy customers into leaving the onboarding process. As more and more customers and businesses offer online transactions, verifying customer identity becomes more prevalent. To keep up with the growing customer demands and legal obligations, businesses have to apply a series of customer verification processes.

There are some methods organizations all over the world can follow to reduce friction during the customer verification and onboarding process.

How to Reduce Friction During Customer Verification?

1. Eliminate the Tediousness

Verification of customer identity is crucial when money or sensitive information is involved. Businesses build their reputation around good customer experience. It’s reasonable that most businesses would want their customer verification process to be as accurate and as effective as possible.

Most organizations fail to understand the difference between an efficient and a smooth process. A perfect customer verification process can also be uncomfortable and monotonous for users. In this digitally driven world, poor customer experience is the stepping stone for driving users away. 

The key is to find ideal authentication and verification methods that don’t make the onboarding process tough. It is not a good business strategy to provide customers with a poor customer experience. One example of smooth and efficient verification is Two-Factor or Multi-Factor Authentication. This verification process requires your customers to enter their username-password and then enter a code that’s sent to their email or mobile phone.

As multi-factor authentication is really common worldwide, the process is easy to recognize and provides an incredible user experience for the customers.

2. Make The Process Faster

The world has gone digital, customers don’t want to wait for hours for a simple onboarding process. One of the fastest methods of authentication is by allowing your customers to log in by using their accounts like Microsoft accounts, Google accounts, and Facebook. Although you’ll have to make your customers trust in the process and that the username and password are not shared by anyone.

This method of customer verification is very common as almost all people use Facebook, Twitter, Google, and Microsoft. This process is sure to reduce friction as most users are aware of this type of customer verification process. To make things better, it is fast, secure, and seamless. 

3. Don’t Over-Rely on Humans

If the customer verification process isn’t automated, then it automatically leads to additional friction and poor customer experience. The manual verification process can become overwhelmed if there’s an influx of customers waiting for verification. 

As the business grows, so does the number of customers. With a manual verification process, it can become tough to keep up with the customer demands. Increased customer demand can create a bottleneck that slows the process down immensely. It’s a problem that can become too tough to handle. 

Well, you can always hire extra employees to keep up with the growing demand. Although, having an automated customer verification process can be a far more viable solution as opposed to hiring a new team. 

Manual processing of customer verification usually relies on cumbersome methods of getting ID information. Manually authenticating all the information can take too much time, also the manual verification process can be riddled with errors. Human error is a part of life and manually verifying customer information can be full of errors. Human errors are exactly the weak points fraudsters look into in a verification process. To avert this disaster, an automated verification process is suggested. As a business, you should consider checking your customer’s information automatically using “Knowledge-Based Authentication”. 

4. Choose a Flexible Customer Verification Process

A simple rule of thumb is that you build a strong process of verification for verifying customer data. Fraudsters will always try to get through a business’s systems for completing fraud of any kind. As a business, it is imperative that you keep building stronger solutions. As verification features get stronger, fraudsters keep deriving new methods of getting around the verification process. 

Customer verification systems are under a constant threat of attack from fraudsters. The best systems offer different methods of customer verification, enhancing speed and customer experience which can’t be done using a manual method of verification. 

You should make sure not to rely on just one verification method that can be easily broken down. The method of verification you chose should be able to offer verification from different providers or different ways of verification. 

5. Verification Methods Should Not Violate any Laws

Businesses aren’t aware that some automated ID checking processes can violate privacy and other laws. If your business is associated with a service provider that doesn’t follow rules and regulations, your business can be open to huge fines.

A lot of jurisdictions require advance notification and consent to process a person’s ID information. In some unique cases, you may even require written consent from the customers. Some online businesses have no choice but to use manual customer verification due to certain restrictions.

Businesses need ID verification solutions because some products and services are age-restricted. Not following this particular rule can lead to a huge lawsuit. Before choosing a customer verification solution, a business needs to make sure that it follows all the legal requirements for its customer base.

Conclusion

Your end goal should be to provide your customers with a smooth user experience, while still accurately verifying the ID of your customers and complying with legal obligations. Fortunately, solutions like DIRO’s online document verification can offer you instant customer document verification. Instant document verification means instant customer ID verification which reduces friction immensely and eliminates human error and detects and mitigates fraud. DIRO provides 100% proof of authentication backed by forensic data.