What is the purpose of the address discrepancy rule?

• A. To flag discrepancies in tax records
• B. To ensure identity is verified when there is a mismatch between the consumer-provided address and the address on file
• C. To update customers' addresses automatically
• D. To report mismatches to credit bureaus

Answer: (B)

An address discrepancy rule is about protecting identity by requiring identity verification whenever the address a consumer provides doesn’t match the address on file. When there’s a mismatch, lenders must take reasonable steps to confirm who the consumer is before proceeding with credit or account activity. This helps catch attempts at identity theft because a fraudulent user may know a person’s details but not the correct registered address. The rule isn’t about flagging tax records, automatically updating addresses, or reporting mismatches to credit bureaus, so those options don’t fit. The main purpose is to add a security check to verify identity when an address discrepancy is present.