Verification of clients is not required for all matters.
Because there is no obligation to meet with a client face-to-face to identify the client, keep in mind the distinction between identifying and verifying the identity of a client:
Identifying the client means obtaining certain basic information about your client and any third party directing, instructing or who has the authority to direct or instruct your client, such as a name and address. You must obtain this information whenever you are retained to provide legal services to a client unless an exemption applies. This step can be done over the phone or by video conference. There is no requirement that it be completed face-to-face.
Verifying the identity of a client means looking at an original identifying document from an independent source to ensure that your clients and any third parties are who they say they are. You are only required to verify the identity of your client and such third parties if you are involved in a funds transfer activity, that is, you engage in or instruct with respect to the payment, receipt or transfer of funds, and an exception does not apply.
Verification of client identity occurs face-to-face unless verification is provided by an agent pursuant to an agency agreement between you and the agent.
Managing the Risk of Face-to-Face Verification via Video Conference:
If you use video conference to conduct face-to-face verification of client identity instead of being in the physical presence of the client or using an agent, consider the following factors to help manage some of the risk:
- If there are red flags associated with fraud or money laundering, attempt to mitigate risk, and determine if you should proceed
- Stay alert to the fact that persons may attempt to use situations like COVID-19 as an opportunity to commit fraud or other illegal acts and to be particularly vigilant for red flags of fraud or other illegal activities.
- Where virtual methods are chosen, you must be particularly alert to these red flags to ensure you are not assisting in or being reckless in respect of any illegal activity.
- Document any red flags, what measures you have taken to mitigate that risk, and you decision on how you proceeded or did not proceed.
- Using another method of verifying identity that may reduce the risk of fraud or money laundering such as the dual process or credit file methods.
- Verify early, not when under pressure to close a transaction. Leave time in case you need to get an agent. Do not feel pressured to accept something.
- Documents are hard to read if held up to a camera. If you must use remote verification, watch the client scan or photograph their ID, then send it to you immediately. Compare what you can see on video.