Together with the Law Society, the Chartered Institute for Legal Executives (CILEx) and the Council for Licensed Conveyancers (CLC), HM Land Registry spent much of the latter part of 2020 working to find a way to improve the conveyancing process and help the property market in challenging times.
In our current world of remote working, the legal sector is already starting to use digital identity checks especially in the high-volume transactional world of conveyancing.
Verification of someone’s identity is clearly important but should always be just part of a wider risk assessment when onboarding new clients to your firm. That said if you can comply with Safe Harbour Standard then the Land Registry will offer practitioners a “NO RECOURSE” promise that will be of interest to compliance officers and heads of conveyancing departments across the country.
With a reported 32% rise in identity fraud over the past 5 years (to 2019); the government have been compelled to consult on the use of digital identification in a safe and secure way.
Despite the coronavirus pandemic, the property industry continued, and the last six months has seen a ‘mini boom’ with transactions levels higher than they have been for over 10 years. The increased workloads have meant the requirement for more I.D. checks and less time in which to complete them. This is a worry for firms and their professional indemnity insurers.
The Government conducted research into the use of remote digital identity verification based around the system used by the Home Office for EU settlement applications. It was found that 79% of users considered the system fairly easy or easy to use. The result of which was that HM Land Registry drew up a set of requirements using the use of biometric identity solutions together with cryptographic technology.
HMLR have now said that
“We believe that there is scope for an alternative higher standard of identity check – one that uses biometric and cryptographic technology, is defined and gives clarity and certainty to the conveyancer that they have discharged their duty on identity verification in connection with land registration applications.”
Importantly they go on to say;
“A conveyancer who adopts this approach will have fulfilled their obligation to take reasonable steps in relation to the requirement to verify their client’s identity and will reach the “Safe Harbour”. This means that if a conveyancer carries out the steps described in the standard, HM Land Registry will not pursue any recourse claim against the conveyancer resulting from the registration of a fraudulent transaction on the grounds that identity checks were inadequate.
Based on the principles of the government’s Good Practice Guide (GPG45), the Safe Harbour Standard provides guidance on a higher level of digital identity check.
It involves using biometric and cryptographic technology to formally verify a person’s identification.
This is particularly important when confirming that a person, or persons, is genuine and legally able to conclude a transaction, such as buying or selling a property.
The criteria to meet the Safe Harbour Standard are made up of four requirements, of which the first three must be met.
Any conveyancer, solicitor or other party must ensure that the person they are representing is who they say they are.
To do this, the person must have evidence that incorporates biometric and cryptographic capabilities that can be checked, such as an electronically held photograph which can be used for biometric facial recognition.
How does Minerva do this?
Integrated into the Minerva solution is a mobile app which utilises NFC reading technology to read the RFID chip embedded in passports.
This is the most reliable and secure method to determine whether it is a genuine government issued document.
All data is securely stored in the cloud keeping the information safe and secure, in line with GDPR.
Minerva’s ID verification solution already meets the Safe Harbour standard for reading passport RFID chips with NFC technology.
We will shortly extend this feature to Identity Cards and UK biometric residence permits.
As long as the evidence meets Requirement 1, and it is genuine, the evidence must be verified.
This is done using an identify check provider, such as Minerva’s ID solution. The system reads the chip that’s incorporated in the cryptographic evidence to verify:
Once the above requirements have been completed, the person’s information has to match the photographic evidence provided.
The identify check provider must cross-reference the biometric information collected in Requirement 2 with the documentation and photographic evidence provided by the person.
Video: Our new passive liveness feature means that end users will no longer have to take the second selfie, where they copied the random action, like touching their nose or chin for example.
Conveyancers acting in the sale of a property must also obtain two examples of evidence that checks the name and address of the person claiming that identity.
Examples of such evidence include a recent utility bill, bank or building society statement from the last three months, a council tax bill for the current financial year, a current photo card driving licence or an insurance policy schedule for the property.
In order to reach the Safe Harbour Standard, conveyancers must have carried out all the requirements.
Not only that, but they must also continue to be vigilant for any irregular activity throughout the transaction, until completion. All evidence must be recorded together with any evidence from further checks and enquiries should they believe these to be necessary.
How does Minerva do this?
Minerva’s technology partners offer comprehensive checks on over 4,000 types of identity documents, including driving licenses, utility bills and bank statements.
We've produced a quick guide here.
Adopting the Safe Harbour Standard approach indicates to HM Land Registry that a conveyancer, solicitor, court administrators or anyone that needs to digitally verify a person’s identity, have taken all reasonable steps to conduct identity checks. In return, HM Land Registry has confirmed that should any fraudulent action take place at a later date, they will not pursue any recourse claim on the grounds that identity checks were inadequate.
Without adopting the Safe Harbour Standard for all digital identity checks, and meeting its requirements to the full, conveyancers and other legal or financial representatives leave themselves open to potential risk. HM Land Registry could ‘come knocking on the door’ seeking compensation on behalf of the victim for fraud or negligence.
The use of digital identity checks is being adopted throughout the country, not just by the legal industry but other industries as well that need to comply with AML and KYC regulations.
If you need a comprehensive digital client onboarding solution that is available anytime, anywhere, Minerva’s cloud-based solution is the right choice.
Be confident in knowing you’ve carried out your due diligence and regulatory requirements, and reduced the risk of fraud to keep your clients safe and secure, with Minerva. Trust the ‘Wise Owl’ of Minerva for the best paperless end-to-end onboarding and facial digital ID verification provider. Book a no-obligation demo today.