TLDR (too long; didn’t read):

• The process of VOI underpins the integrity of conveyancing transactions, helping prevent fraud and ensuring consumer protection.

• When conducting VOI, there’s no “one size fits all” measure - the approach should be tailored to each client and transaction.

• The industry is encouraged to embrace digital VOI tools, but it’s important for consumers to understand the platform’s data security protection measures before use and third or fourth party supply chain risk for entities.  

In a digital age, set against the rising property market in Australia and the staggering increase in identity crime, the regulation of property transactions to protect against fraud, and the implementation of sound procedures is paramount. 

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The Elevator Pitch

The process of Verification of Identity (VOI) acts as a safeguard, providing a compliance framework to ensure individuals are who they purport to be, including at a specific time in a transaction

VOI traditionally, involves a qualified individual citing “100 points of identification”, and certifying that the person in the identification documents and the person they are identifying, are one and the same. This process is essential in the prevention of fraud and negligent land transactions.

The process of VOI is mandated by Financial Institutions and Land Registries nationwide (to name a few), as a prerequisite to the opening of a bank account or the execution of instruments, such as National Mortgage Forms or Transfers of Land. 

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Who Needs to Conduct VOI?  

 The responsibility for VOI activities in Land Transactions, is held with the following parties:

• Mortgagees, lenders or their Solicitors, - must verify the identity of the mortgagor or borrower.  

• Legal practitioners and conveyancers - must verify the identity of their clients to transactions.

• Self-represented parties – must verify their identity using an independent qualified individual (Justice of the Peace, Solicitor, etc).

The above parties can either conduct VOI on their clients or engage Identity Agents, to undertake VOI as prescribed.

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The Long Story Short

The rapid rise of technology-based VOI solutions, removing the need for the traditional “face to face” meeting and providing a platform for verification to take place via  online means, boasts innovation, whilst attempting to balance flexibility with robust security measures.  

The consensus from the wider conveyancing community, is the adoption of digital VOI tools has resulted in increased efficiency and greater convenience for clients, as they are able to complete this process from the comfort of their own homes. However, with the growth and prevalence of electronic solutions, the question of whether traditional methods of VOI fall short against its digital counterparts is rife. 

The regulator, Australian Registrars National Electronic Conveyancing Council (ARNECC), clarified in a statement released in 2020, that individuals will need to ensure any digital tools utilised are equivalent to the current golden face to face VOI standard, and the responsibility to ensure they take “reasonable steps” to conduct identity verification is held with individual Subscribers.

Although traditional means of VOI, are tried and tested, it is not free from its own shortfalls. The 2023 case of  Issa v Owens & Ors [2023] QSC 004  saw the registration of a fraudulent mortgage over a Queensland property, in which a Solicitor, engaged by the mortgagee, purportedly conducted VOI and witnessed the execution of the mortgage. However, later admitted, they did not in fact bear witness to the mortgage or take reasonable steps to conduct any identity verification.

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What Does this Mean for Businesses?  

Whilst Businesses in the industry are presented with an array of choices when it comes to undertaking VOI, it is important that best practice is not compromised for convenience.  

Businesses must ensure that they are considering each transaction, including its regulatory complexities and unique business offering intricacies, including their clients, when deciding a method of action for VOI.

Whilst digital tools provide efficient and timely solutions, adequate research should be conducted into the platform’s data security protection measures and security certifications, providing a holistic picture, prior to implementation in your business.

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More Information

https://www.marinolaw.com.au/marino-law-wins-landmark-fraud-case/

 Disclaimer: This article is intended for informational purposes only and should not be interpreted as legal or financial advice. Lextech strongly recommends seeking professional advice to ensure that any actions taken are tailored to your specific business needs and circumstances. Lextech shall not be held liable for the accuracy or completeness of the information provided herein, particularly when accessed at a later date, as the content reflects the state of knowledge at the time of publication.