Unauthorized Address Change Requests

Unauthorized address change requests can be made on customer accounts to commit fraud such as divert mail and receive merchandise and replacement credit cards. When companies properly manage their customer address change requests, they are in a position to detect unauthorized address changes and prevent identity fraud.  

In fact, there are certain rules that financial institutions and creditors which issue debit or credit cards must follow to assess the validity of address change requests. As such, issuers of credit or debit cards must implement reasonable policies and procedures to verify a change of address request and prevent credit or debit card fraud especially in circumstances where the card issuer receives a request for an additional or replacement card for an existing account within 30 days of an address change request.

Detecting Unauthorized Address Change Requests

The regulatory rules as well as best practices require one of three methods for validating an address change request. In order to ensure that a new address is a valid address which belongs to the account holder, companies must:  

• Notify the cardholder regarding the address change request at the cardholder's former address and provide the cardholder with a reasonable means to promptly report an incorrect address change;
• Notify the cardholder of the address change request with a previously agreed upon communication method and provide the cardholder a reasonable means to promptly report an incorrect address change; or
• Use other means of evaluating the validity of the address change request in accordance with the reasonable policies and procedures established by the card issuer as part of its Program to prevent, detect, and mitigate identity theft.

A card issuer may satisfy its regulatory obligations by validating an address change pursuant to one of the three methods described above at any time after it receives a request for an address change but before the issuer receives and processes the request for an additional or replacement card. The address change validation process must consider written or electronic notice which is clear, conspicuous and separate from the card issuer's regular correspondence with the cardholder.

Although the rules apply to all financial institutions and creditors that issue a debit or credit card and are subject to the Federal Trade Commission's administrative enforcement of the Fair Credit Reporting Act or other entities regulated by the federal financial institution regulatory agencies, many other types of companies whether financial or non-financial in nature can benefit by implementing policies and procedures to detect unauthorized address change requests and reduce their losses whether they ship phones or other merchandise.

Read about address discrepancy management after reading about unauthorized address change requests.