Industry regulators have reminded legal practitioners of the importance of using electronic ID and verification processes in order to safely comply with governmental social distancing advice whilst in lockdown.
The Council for Licensed Conveyancers (CLC) released a guidance note yesterday reminding legal practitioners of their legal obligations to verify client identification under the Money Laundering Regulations (MLR). A task that may prove very difficult now that solicitors and clients are unable to meet during the pandemic.
The Council for Licensed Conveyancers guidance note stated:
“While you are not able to meet clients in person and view physical identify documents, consider using alternative digital ID&V methods that provide you with enough assurance that a client is who they claim to be. These methods could also be useful for your firm and clients even after social distancing requirements are relaxed.”
The guidance highlights that any electronic ID verification tool should be “secure from fraud and misuse” (R28(19)) and provide an ‘appropriate level of assurance’. The CLC advise legal practitioners to:
- “Understand what it does and how it works. For example, which databases are checked?
- Take a risk-based approach to relying on the service based on the assurance level it provides.
- Understand whether different levels of assurance are available and how these should be used in different situations.
- Think about the effect using a particular service will have on the level of risk you attribute to non-face to face transactions.
- Use anti-fraud and other cyber-security measures to support the service.
- Consider whether the service has an accreditation or certification from any of the bodies in this list.
- Ensure the service provides you with the information you may need to provide to the CLC or law enforcement to show your compliance with the MLRs and keep records of this.”
The Conveyancing Association (CA) is also calling for the Mortgage Lenders Handbook to be updated in order to encourage more conveyancers to adopt electronic verification processes.
Having already lobbied the UKF and BSA to update and amend sections of their Handbooks which, according to the wording, currently require law firms to obtain paper documents in order to remain compliant.
The CA is also asking for conveyancers to complete a short survey on the subject to help bolster their arguments and the sector’s concerns.
The email request from the Conveyancing Association read:
“We are working with the regulators, UKF, BSA and HMLR to enable more conveyancers to adopt electronic verification processes. We are lobbying UKF and BSA to amend Part 1 sections 3.1.5 and 3.2.5 of the Handbook which are out of date and, we believe, need updating. UKF have asked us to establish whether there is any impediment to the process and whether law firms feel that they have to obtain a paper document to comply with the wording of the handbook.”
