Does Remote VOI pass the Reasonable Steps test?
VOI rules require that mortgage brokers take reasonable steps to verify the identity of their clients.
What constitutes reasonable steps is dependent on the circumstances of each individual case. However, in Schedule 8 of its Model Participation Rules, ARNECC sets out a Verification of Identity Standard, which if followed is deemed to constitute reasonable steps (Rule 6.5.6). The VOI Standard requires:
- VOI to be conducted during a face-to-face in-person interview;
- that the verifier be satisfied that the person being identified is a reasonable likeness to the person depicted in photos on the identity documents; and
- that the identity documents provided meet one of the set out categories.
It is a common misconception that if you stray from the VOI Standard you are not taking ‘reasonable steps’.
Of course, it is advised to follow the VOI standard whenever possible as it can provide safe harbor, however it is important to note that the VOI standard is not mandatory in situations where it is not possible to follow. There are circumstances in which a face-to-face in-person interview is not possible due to remoteness, and in those cases brokers can conduct VOI by taking other reasonable steps.
“ARNECC explicitly acknowledges this type of remote situation.“
It provides a list of examples of further steps that can be taken, citing one example as “where the verification is unable to be conducted face-to-face due to remoteness conducting the verification by ELECTRONIC MEANS with further steps to satisfy yourself of the person’s identity." ARNECC Model Participation Rules Guidance Note 2 [page 5, 5.5 Further Steps].
The Best Electronic Option?
Mobile Apps like IDme have a REMOTE option that allows brokers to complete the verification by electronic means on their iPhone or iPad. Using IDme, the client can securely send the broker photos of the identity documents so the broker can assess whether they appear genuine. Once the broker has received sufficient identity documents, they then arrange a video call with the client during which they take a photo of them and can compare it to the documents to confirm likeness. Finally, the broker and client sign client and verifier declarations and IDme creates a VOI report that is securely stored in the cloud server for 9 years.
Option 1: Brokers can send customers to their local Post Office. Think long queues, delays & high cost.
Option 2: Some companies are offering couriers to conduct the VOI on the broker‘s behalf. But will customers feel comfortable handing over their ID to a complete stranger?
The bottom line is that using a mobile App like IDme to conduct VOI remotely is still the best and most secure option after a face-to-face VOI. Some lenders are getting very cute about scrutinising any solution that is digital but the reality is that the current manual state of conducting VOI is frought with security and privacy dangers. Brokers commonly complain about having hard copies of clients ID floating around their suit case and office. Some dont have the storage space or the security destructions facilities. Worse still, some brokers who are photographing and using generic Apps to convert ID documents to PDF are walking around with people’s ID documents on their camera roll! Mobile Apps like IDme dont store any information on the mobile phone or the App itself.
It is important to remember that even when the VOI Standard is followed, brokers must undertake further enquiries where doubt arises, or should reasonably have arisen (Rule 6.5.3). As a guide, The Participation Rules require further steps to be taken where:
- an identity document does not appear to be genuine;
- a photograph on an identity document is not a reasonable likeness;
- the person being identified does not appear to be the person to which the identity documents relate; or
- it is otherwise reasonable to take further steps.
For further information please contact Sam Makhoul on 02 8719 4088 or 0418 888 966.
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