As the risk surrounding identity fraud and money laundering evolves, so too does the technology used to fight it. The introduction of a new industry benchmark from HM Land Registry has pulled ID verification into the 21st century.
This quick five-minute read will get you up to speed with this new Anti-Money Laundering touchstone, and the technology which has made it possible, detailing why its adoption can be of huge benefit for law firms and conveyancers dealing with AML.
What is the HM Land Registry Digital ID Standard?
In March 2021, HM Land Registry presented new guidance for a higher standard of identity verification within the industry.
This new benchmark encouraged the use of both biometric and cryptographic technology checks, which would offer a greater level of fraud prevention, as well as enhancing efficiency and convenience during client onboarding.
Upon conducting these checks, the conveyancer would have reached ‘Safe Harbour’ status for that case.
Why was it brought in?
“The current processes in conveyancing do not feel very 21st century and they have proved difficult to maintain in the current crisis. What can we do about it?”
Mike Harlow, Deputy Chief Executive and Director of Customer and Strategy
A Land Registry blog post from May 2020 raised concerns around fraud prevention and identity checking practices within the industry.
The article spoke of the “inconvenience and inconsistency” of outdated, manual verification methods which relied on the variable factor of human ability, compared to the more modern electronic passport checking methods.
Fuelled in part by the COVID pandemic, embracing these modern methods would not only greatly reduce the need for face-to-face meetings, but allow the conveyancer to complete checks in a more efficient, convenient way.
What is Safe Harbour?
If solicitors and conveyancers adopt and adhere to these new guidelines, either for residential or commercial transactions, HMLR will consider them to have “taken reasonable steps” to verify customer identities, and they would have reached Safe Harbour.
This means that HMLR would not seek recourse against the conveyancer should the identity of their client confirmed later in the process to be inaccurate.
How do you reach Safe Harbour status?
The three stages are:
- Obtaining evidence from the client
- Checking the validity of the evidence
- Matching the identity to the evidence
A fourth requirement is an additional check to be carried out by the conveyancer who represents a transferor, borrower, or lessor in the transaction.
What are the benefits to law firms?
Embracing this new yardstick of verification can provide an efficient, cost effective, and reliable approach to legally verifying if a person is genuine when buying or selling properties. Advances in technology such as NFC in smartphones speed up the process, whilst AI authenticity checks can spot fake documents with fast and reliable ease. With these advances bringing peace of mind to a once problematic area of conveyancing, it’s understandable why these guidelines are being adopted in many law practices.
