How strict Verification of Identity rules are helping combat cybercrime

Key takeaways

  • Identity theft and cyber fraud affect one-in-five Australians and cost the nation’s economy up to $1 billion each year. 
  • With the emergence of e-conveyancing, these issues have taken on greater importance with VOI and the signing of electronic documents and most jurisdictions have strengthened the witnessing requirements in their Land Title offices and registries. 
  • Requirements for the completion of a VOI through a face-to-face meeting, review of original proof of identity documents and signed client authorisations in some cases.

 

Cybercrime is a growing problem with some alarming statistics showing that identity theft and cyber fraud affects one-in-five Australians.

The Department of Prime Minister and Cabinet commissioned the Cyber Security Review, which identified that cybercrime costs the Australian economy up to $1 billion each year. In addition to monetary losses, cybercrime can lead to damage to personal identity and reputation and loss of business opportunities.  

To combat this growing problem, Australian state governments, law societies and legal practice insurers are requiring solicitors to undertake Verification of Identity (VOI) steps.   

With the emergence of e-conveyancing in most jurisdictions, these issues have taken on even greater importance with VOI and the signing of electronic documents. Most jurisdictions have strengthened the witnessing requirements in their Land Title offices and registries for the lodgement of certain documents. 

Since 30 September 2019, the Land Title Act and Land Act in Queensland requires anyone who witnesses the signature of an individual to: 

  • Take reasonable steps to verify the identity of the person signing;
  • Take reasonable steps to ensure the individual is entitled to sign the document; and
  • Retain for seven years, records of the steps taken to verify the identify and entitlement and copies of the documents and other evidence obtained during the verification process.

For PEXA e-conveyancing settlements, there is a requirement for a VOI process which complies with the Model Operating Rules (“Rules”) set down by the Australian Registrars National E-Conveyancing Council (“ARNECC”).

The Rules require completion of a VOI through a face-to-face meeting and reviewing original documents for proof of entity. The Rules also require the solicitor to obtain a signed Client Authorisation document. 

The e-conveyancing requirement in the Rules is more onerous than other VOI requirements, with the need for a face-to-face meeting. This cannot be done by video conferencing platforms such as Skype.  Face-to-face in this context requires the parties to be in physical attendance with each other at the same location. 

The face-to-face meeting requirement presents certain difficulties for clients located in regional and remote locations. In the first instance, the easiest option for clients is the face-to-face meeting but if this is not possible other arrangements with a VOI agent can be made including: 

  • The client attending in person at a participating Australia Post outlet; and
  • An identity agent (arranged by the solicitor) attending on the client at their location. 

The documents which are used to conduct the VOI are typically primary documents such as a current Australian passport and a current driver’s licence. 

If these are not available, certain secondary documents may be used. In circumstances where there are limited identity documents, an identify declaration may be used. 

Further documents may also be required to determine a person’s authority or entitlement to sign things or provide instructions such as company searches, trust deed or other appointment documents.

The information in this blog is intended only to provide a general overview and has not been prepared with a view to any particular situation or set of circumstances. It is not intended to be comprehensive nor does it constitute legal advice. While we attempt to ensure the information is current and accurate we do not guarantee its currency and accuracy. You should seek legal or other professional advice before acting or relying on any of the information in this blog as it may not be appropriate for your individual circumstances.