Verifying identity under the model rules
Under the national model rules for electronic conveyancing, a subscriber can apply the Verification of Identity Standard or verify identity in some other way that constitutes reasonable steps. The rules were published by the Australian Registrars National Electronic Conveyancing Council.
The same rules require further steps to verify identity where the subscriber knows or ought reasonably to know that an identity document is not genuine. “Ought reasonably to know” is the test: if the red flags were there to see, you cannot say you did not notice.
Remember
- Two options: the standard, or other reasonable steps.
- More steps are needed when you know or ought to know a document is not genuine.
- Red flags you ignore count against you.
Facts and sources for this part
- Under the national model rules for electronic conveyancing, a subscriber can apply the Verification of Identity Standard or verify identity in some other way that constitutes reasonable steps. [S10]
- The same rules require further steps to verify identity where the subscriber knows or ought reasonably to know that an identity document is not genuine. [S10]
Documents that look right but are not
Our advice: a clean-looking identity document, bank statement or letter proves little. Documents made with AI tools can have the right fonts, a tidy layout and details that agree with each other.
Our advice: test the source. Was the document handed to you in person, or sent from an address you cannot confirm? Does the photograph look like the person? Does the story of the matter fit the person’s age, address and way of speaking? Do the details agree with other records you hold?
Remember
- A tidy document is not proof.
- Check where it came from and whether it fits the person.
- Use the other records you hold.
Facts and sources for this part
- The same rules require further steps to verify identity where the subscriber knows or ought reasonably to know that an identity document is not genuine. [S10]
The new client who does not add up
The Law Society describes an old scam in which a foreign cheque is banked and the balance sent on quickly, and when the cheque does not clear the bank uses the funds of other clients in the trust account to cover the transfer. It also lists receipt of trust money from unknown or unexpected sources among the irregularities that must be reported.
Our advice: a stranger who finds you online, has no referral, is keen to pay promptly, gives little detail about the matter and insists on speed is the profile to be careful with.
Remember
- Unknown clients with unexplained money are a risk.
- Unexpected money must be reported as an irregularity.
- Speed and little detail together are the warning.
Facts and sources for this part
- The Law Society describes an old scam: a foreign cheque is banked, the balance sent on quickly, and when the cheque does not clear the bank uses the funds of other clients in the trust account to cover the transfer. [S5]
- The Law Society says an irregularity includes fraud, cyber-crime, or receipt of trust money from unknown or unexpected sources. [S6]
Someone pretending to be your practice
The Australian Cyber Security Centre warns that criminals target all parties in the real estate sector, with a particular focus on impersonating conveyancing lawyers and communicating with their clients. Your name and letterhead can be used against your clients.
Our advice: tell new clients, in writing and at the start, how you will and will not contact them and that you will never change bank details by email. Keep that message in your engagement letter.
Remember
- Your name can be used to defraud your clients.
- Tell clients how you will and will not contact them.
- Put the bank-details rule in the engagement letter.
Facts and sources for this part
- The Australian Cyber Security Centre warns that criminals target all parties in the real estate sector, with a particular focus on impersonating conveyancing lawyers and communicating with their clients. [S7]
Scenario: a client who is hard to meet
A new client, “Mr Ashby”, asks you to act on the sale of an investment property. He sends a photo of a driver licence by email, has an overseas phone number, wants the proceeds sent to a different person’s account, and says he cannot come to the office.
The right move: follow the identity steps required for the work, ask for an in-person or independently verified check, and decline to pay a third party until the owner’s instruction is confirmed through a channel you control. If the pieces still do not add up, do not act, and treat unexpected money from unknown sources as reportable.
Red flags: a remote client with a remote story, a third-party payee, an image of an identity document instead of a check, and urgency.
Remember
- Verify identity independently, not from a photo sent by email.
- Do not pay a third party on an unconfirmed instruction.
- If it still does not add up, do not act.
Facts and sources for this part
- Under the national model rules for electronic conveyancing, a subscriber can apply the Verification of Identity Standard or verify identity in some other way that constitutes reasonable steps. [S10]
- The same rules require further steps to verify identity where the subscriber knows or ought reasonably to know that an identity document is not genuine. [S10]
Check what you have learned
Three questions from the test, each explained. Tap an answer.
Question 1 of 3
When must further steps be taken to verify identity?
Show the answer
Right answer: A, When the subscriber knows or ought reasonably to know that an identity document is not genuine. Further steps are required where the subscriber knows or ought reasonably to know that an identity document is not genuine. [S10]
Question 2 of 3
Which profile fits the old cheque scam?
Show the answer
Right answer: A, A new client who sends a foreign cheque and wants most of it sent on quickly. In the scam a foreign cheque is banked and the balance sent on quickly before the cheque fails to clear. [S5]
Question 3 of 3
What should your engagement letter say about bank details?
Show the answer
Right answer: C, That the practice will never change its bank details by email. Impersonation of conveyancing lawyers is a particular focus of criminals, so tell clients how you will and will not contact them. [S7]