We are living in challenging times with COVID-19 flipping our lives and economies upside down. As many of us struggle with our new realities, legacy industries are being re-evaluated to adapt to the digital economy. One of such examples is the real estate industry which is currently struggling with providing a digital solution for homebuyers to be able to verify themselves online when applying for a mortgage or buying a new home. The standards for identity verification are set by the Australian Registrars National Electronic Conveyancing Council (ARNECC) and described in Schedule 8 of the Model Participation Rules (MPR). ARNECC, in consultation with stakeholders across the property industry, has recognised the importance of protecting the Australian economy at large from the risk of identity fraud. To reduce the risk of fraud and the registration of fraudulent transactions, Rule 6.5 of the MPR requires 'Subscribers' to take 'reasonable steps' to verify the identity of a range of parties involved in the property transactions. Following Rule 6.5.2., the Subscriber, or a mortgagee represented by the Subscriber, can either verify the identity by applying the Identity Verification Standard outlined in Schedule 8 of the MPR or verify the identity of a person in some other way that constitutes taking 'reasonable steps'.
To date, ARNECC has not published a definition guide of what is considered to be 'reasonable steps', deferring to the courts in the appropriate jurisdiction to determine reasonableness based on the individual cases. However, they do assert that 'reasonableness' constitutes an action taken by an 'ordinarily prudent subscriber' in the 'ordinary course of their duties'. Where the Identity Standard requires a face-to-face regime, i.e. it must be conducted during an in-person interview between the Identity Verifier and the person being identified, the MPR 6.5.2.(b) method of identity verification does not explicitly demand a face-to-face interaction. We can reasonably assume that digitising the process of identity verification in a way that meets and exceeds the reliability of the verification results that would otherwise be obtained with the Identity Standard would suffice the ‘reasonable steps’ requirement. This can be done by verifying the obtained documents with the DVS (Document Verification Services), conducting a liveness check of the person being verified and performing biometric matching to make sure that the individual being verified is the same one as on the provided ID documents.
ARNECC has shown that they are adaptable to the changing circumstances of the Australian economy. Once COVID-19 lockdowns were enforced, they provided a Position Statement about client authorisation and verification of identity as a result of COVID-19 to reiterate that face-to-face verification is not mandatory and subscribers can verify the identity of their clients in a way that constitutes ‘reasonable steps’. Technology solutions such as bronID can be used to replace traditional face-to-face verification. bronID provides electronic ID Verification solution that a Subscriber can use to verify their clients online and this includes the above-mentioned techniques such as verifying the documents directly with the DVS, performing liveness and biometrics checks. If you want to learn more about the bronID electronic VOI, please contact us at firstname.lastname@example.org.