The Federation of Law Societies has issued guidance requiring the use of a technology product capable of verifying the authenticity of the government-issued photo ID when the verification is happening remotely.
To allow for the implementation of the technology required to facilitate this process, the temporary pandemic relief measure of allowing verification by viewing a government-issued identity document with the person over a video call will be extended until January 31, 2024. After this date NSBS members must return to in-person verification of Client ID or adopt remote ID authentication technology conforming to the Federation guidance.
As a reminder of Client ID rules, when a lawyer is retained to provide legal services and engages in or gives instructions involving the receiving, paying or transferring of funds, they must verify their client’s identity using one of three methods:
- reviewing government-issued photo ID;
- reviewing the client’s credit file; or
- the dual-process method (reviewing two original, valid and current documents or information from independent and reliable sources).
This guidance relates to the first method: reviewing government-issued client ID. To complete verification using government-issued ID, you must
- Verify by reviewing the government-issued photo ID in person (either yourself or through an agent);
- Verify the ID remotely using remote authentication technology which assures you of the validity and currency of the ID, in line with the Federation of Law Societies’ guidance.
- If you opt for in-person review, you are permitted to use remote authentication technology to verify the identity document.
You are encouraged to perform due diligence to select a means/service provider, as this is an area involving innovations in technology.
The most common method chosen to verify a client’s identity is the government-issued photo ID method. This is usually completed in person during a face-to-face meeting with the client. Confirm that the person signing the closing documents is the same person whose ID you verify.
Money laundering and identity fraud continue to be a serious concern. To avoid becoming involved in this type of illegal activity, please continue to manage risk and remain highly vigilant.
Remote verification with Authentication Technology
If the individual is not present, you or your agent may use the government-issued photo identification methodif you have a process in place to authenticate the government-issued photo identification document and to determine that it is valid and current. (This guidance does not preclude you from using an authentication process in person.)
To authenticate the document, you could use a technology capable of determining the document’s authenticity. For example, you could:
- ask the individual to scan their government-issued photo identification document using the camera on their mobile phone or electronic device; and
- use a technology to compare the features of the scanned document against known characteristics (for example, size, texture, character spacing, raised lettering, format/design), security features (for example, holograms, barcodes, magnetic strips, watermarks, embedded electronic chips) or markers (for example, logos or symbols) to be satisfied that it is an authentic document as issued by the competent authority.
To determine that the authenticated document is valid and current and that the name and photo are those of the individual providing the document, you could:
- participate in a live video call with the individual and compare the name and the features of the live video image to the name and photo on the authenticated document; or
- ask the individual to take a photo of themself using the camera on their mobile phone or electronic device and use an application to apply facial recognition technology to compare the features of the photo they took to the photo on the authenticated document. You would also need a process to compare the name on the document with the name provided by the individual.
Viewing a photo I.D. over a video call is not sufficient to determine the documents authenticity.
These technologies have the potential to reduce risk in the verification process.
Where can I find authentication technology?
This type of technology is still new and is being introduced in Nova Scotia. NSBS does not currently envisage being able to approve particular technologies/service providers. The onus is on the lawyer to ascertain whether their preferred choice satisfies the burden on them to verify the authenticity of the ID.
We are aware that the Law Society of Alberta has a list of approved sandbox participants and the directory of identity management and proofing products composed by DIACC. These resources may provide a starting point in assessing a technology product.
We expect to say more as more information about these products becomes available.
Anti-Money Laundering and Terrorist Financing in the Canadian Legal Profession Online Learning Program
The Federation of Law Societies has launched an online learning program about the responsibilities and best practices for lawyers related to anti-money laundering and terrorist financing. The training is composed of five modules:
- Understanding the Problem of Money Laundering and Terrorist Financing
- Assessing and Managing Money Laundering Risks
- Key Due Diligence Requirements
- Proper Use of Trust Accounts
- Cash Transactions
The training is available here.