Identity verification for lenders

What lenders ask of identity checks

A loan is money paid out on the strength of an identity. The risk a lender watches is a borrower who is not who the application says: a stolen identity, an edited document, or a person who returns after a refusal or a default under a different name. The check has to be quick enough for the application and strong enough to stand behind the payout.

• Confirm that the person applying is the holder of the document.
• Catch altered, copied and screen-displayed documents.
• Collect a proof of address with the same session.
• Recognise an applicant who was verified, refused or blocked before.

The flow

1. Questionnaire. Collect name, birth date, contacts and custom fields before the KYC starts.
2. Identity document and proof of address. The applicant photographs the identity document, and a utility bill, bank statement or lease is added to the same session as an extra document.
3. Selfie and active liveness. The selfie is matched to the document portrait, and the applicant moves the face through two ovals.
4. Returning applicants. Repeat-user search looks for the same face among earlier verified users, and your own person lists and blocklists are checked in the same flow.
5. Decision. Thresholds and rules from the scenario editor decide whether the application goes on, goes to a person in the dashboard, or stops.
6. Screening where required. AML screening can run in the same flow, and monitored profiles are re-screened every day.

Modules used

• Document verification, including proof of address as an extra document.
• Face verification and liveness.
• Repeat-user search and blocklists, described on the face verification page.
• AML screening, billed separately.
• Scenario editor, dashboard and webhooks to route cases and return the result to your loan system.

Regulatory frame

What the primary texts say. The first five statements are from a United States rule on identity theft whose scope is limited to financial institutions and creditors under Federal Trade Commission enforcement. The last two are from the European Union's AML Regulation, which is forthcoming and applies from 10 July 2027.

• Under 16 CFR 681.1(a), the rule applies to financial institutions and creditors that are subject to administrative enforcement of the FCRA by the Federal Trade Commission pursuant to 15 U.S.C. 1681s(a)(1).
• Within that scope, the rule requires each financial institution or creditor that offers or maintains one or more covered accounts to develop and implement a written Identity Theft Prevention Program designed to detect, prevent and mitigate identity theft in connection with the opening of a covered account or any existing covered account.
• A covered account is, first, an account offered or maintained primarily for personal, family or household purposes that involves or is designed to permit multiple payments or transactions, such as a credit card account, mortgage loan or automobile loan.
• The illustrative red flags in Supplement A to Appendix A include documents provided for identification that appear to have been altered or forged, and a photograph or physical description on the identification that is not consistent with the appearance of the applicant.
• They also include an address or telephone number that is the same as or similar to the address or telephone number submitted by an unusually large number of other persons opening accounts.
• From 10 July 2027, under Article 3, point (3)(k), of Regulation (EU) 2024/1624, credit intermediaries for mortgage and consumer credits, other than credit institutions and financial institutions, are obliged entities, with the exception of the credit intermediaries carrying out activities under the responsibility of one or more creditors or credit intermediaries.
• From the same date, Article 22(6) allows identity to be verified through the submission of an identity document, passport or equivalent together with, where relevant, information from reliable and independent sources.

This block describes the texts, not our service. For information; not legal advice.

Sources

• Title 16 of the US Code of Federal Regulations, part 681, identity theft rules, including section 681.1 and Appendix A, electronic Code of Federal Regulations, fetched 27 October 2026.
• Regulation (EU) 2024/1624 of the European Parliament and of the Council, Official Journal text, fetched 26 October 2026.

Next

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