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Out of Pocket Checks (KBAs)


Out-of-wallet checks are intended to validate the consumer’s identity by asking them questions that are derived from his/her past credit or public records, most typically using credit reports. Generally includes three to ten questions in a multiple-choice format.

Key considerations when implementing or buying this functionality include:

  • Can be costly to use.

  • Requires a lot more intrusive information from a consumer, some may be very reluctant to give this much information unless they are buying something very expensive, or they are requesting credit.

  • Does require that you integrate questions either directly into your web page checkout process, or the use of third-party pop-up verification screens.

  • Typically requires SSN and/or date of birth. Some of the more recent services are using the last four of the SSN with DOB.


Using the credit report the service will create questions based on the consumer’s past spending history. For example:

What is the name of the bank/financial institution you financed your car with in 1997?

a)  Chase Bank
b)  Mitsubishi Motors Credit
c)  Land Rover Credit
d)  Ford Motor Credit

Typically there are five to ten questions with about a 50/50 split on recent versus past activity. Questions usually come from a variety of points such as car loans, home mortgages and credit cards.


The consumer answers all of the questions and the service informs the merchant if the identity was verified (that is, whether they pass or fail). It is possible to utilize a service such as this without getting a credit score. If the consumer fails, you can route them to another channel to try and convert the order, or you can have them mail in payment.

If someone fails this process, make sure you only send correspondence, either mail or phone, to the address and phone listed from the service you used. Don’t send it to the address the new consumer used unless it happens to be a full match to the one on the service bureau record. This is important to ensure you are not aiding an identity theft perpetrator.


Out-of-Wallet Checks are also known as Out-of-Pocket Checks and Knowledge Based Assessments (KBAs).

As a general tool, the out-of-wallet checks are very effective at establishing consumer identity. Although you have no guarantees using this service, you do have some good ammunition in fighting a charge-back. Only the most severe cases of identity theft would be able to pass this check.

The pros and cons of out-of-pocket checks are:

Good tool for establishing consumer identity

Best practice technique for credit issuance

Does not translate well for international orders

Does not require you to get a credit score

Can adversely effect sales conversion



Alternative SolutionsVerified by Visa, MasterCardSecureCode, reverse address and reverse phone number look up

Building this In-House - N/A

Estimated Cost - Typically this service is offered on a per-transaction basis. Because it requires the use of a credit report, costs tend to be significantly higher than using a fraud-screening service.

Sample Vendors - TrustID, LexisNexis, Experian, Equifax

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