One of the major ‘sticking points’ when it comes to delivering a smoother process for home buying and selling is undoubtedly the duplication of tasks that many stakeholders feel they need to complete, before they can move forward.
Beth Rudolf
Now, it’s understandable why agents, advisers, lenders, conveyancers, etc, feel the need to satisfy themselves, for example, that the person they are dealing with is the person they say they are, because we’re all acutely aware of the huge damage identification fraud can bring, not just to the consumer involved but also to all home movers and stakeholders with the inevitable increase in PII premiums.
We are talking about huge sums of money – which is, after all, why fraudsters target the sale of homes – which could be lost, and we have seen plenty of examples over the years, of fraudsters selling homes that are not theirs to sell or individuals being able to siphon off deposit monies, or family members selling or remortgaging homes without the knowledge of the real owners or their co-owners, etc.
However, we should all be acutely aware that it is the duplication of tasks, particularly around ID, that can add a considerable amount of time to the whole process, especially when it is being carried out multiple times, and when in a lot of cases it is an analogue process of checking.
That is, firms needing to see the actual documentation – passport, driving license, etc – or still using the certification method which can still be open to misuse and where it’s possible for fraudsters to have ‘success’.
One further issue – and something we have been asking lenders to do for several years – is around the lack of an update to Part 2 of the UK Finance Handbook which would allow conveyancing firms to accept digital ID when verifying the identity of the client.
Indeed, it is something of a head-scratcher to understand why digital ID isn’t acceptable, given its wide availability and the fact that many of the same institutions already use it for banking services/products and the like.
After all, it is their money which may go missing if the ‘buyer’ is not correctly identified for AML purposes, and they should also be encouraging the borrower’s conveyancer to require that the seller’s conveyancer uses digital ID, otherwise they risk seller impersonation fraud, as mentioned above.
We have been told by UK Finance that each lender operates their own internal ID standards, but this would not stop them from following the existing standards – in line with HM Land Registry’s (HMLR) Safe Harbour – and it would ensure borrowers are correctly identified and the customer journey was less painful.
None of the lenders in Part 2 allow conveyancers to accept digital ID, and yet doing so would also prevent inter-familial fraud, which is actually far more prevalent than seller impersonation fraud.
This means conveyancers have to duplicate ID verification with paper documents as well as with digital ID if they want to reduce fraud but comply with their lender’s instructions. That is not a great customer journey for anyone.
And, if they just use official documents to verify the person they are registering as the owner at HMLR there is no way of checking the relationship between the ID and the person purporting to be the registered proprietor of the property.
If they had been enabled to, then HMLR can use qualified electronic signatures and use those when people interact with the title to check they are the registered proprietor.
Now, I understand that lenders might well be waiting for the current Data Protection and Digital Information (No. 2) Bill to pass through Parliament before they embark on an update to Part 2 and allow digital ID acceptance, but as mentioned, this is something we have been calling on for many years.
This lack of an update is the case, despite us having many other examples of countries, such as Norway, which has effectively eradicated fraud related to ID as a result of utilising digital solutions and some UK Finance members lend there and in other countries where they accept Digital ID already.
Changing Part 2 would bring significant benefits to all those involved in the process, particularly the client, and would actually strengthen the fight against ID fraud in the home buying/selling process. To us conveyancers it feels like a win-win for all concerned, and we are hoping that change in this area is not too far away.
Beth Rudolf is Director of Delivery at the Conveyancing Association (CA)
