Failure to properly check a buyer's identity "does happen more often than you may think"
Around a quarter, or 23%, of UK homebuyers admitted they had not been asked to verify their identity at all, despite the relative ease and range of options available to help do so.
Credas Technologies, an identity verification checks provider, has found through the results of its survey that a significant proportion of UK homebuyers did not undergo a proper identity check, which can be completed quickly with a passport or a driving licence.
Other documents that can be used to verify identity include biometric residence permit, national identity card, or a combination of papers such as council tax bills, bank statements, and utility bills. It can also be done via a KBV, where a number of questions are asked based on personal information from their credit file.
With respect to the homebuyer’s current address, 30% of the respondents stated they provided no proof, for example, in the form of a utility bill or similar.
In addition, 13% stated that they weren’t asked to verify their identity by their lawyer or solicitor once the sale had started to progress, while 18% said that when starting out, their mortgage broker also failed to verify their identity properly.
“For the vast majority of those operating within the property industry, failing to verify the identity of a potential buyer may sound unbelievable,” Tim Barnett, chief executive at Credas Technologies, said. “Not only is there a legal requirement to do so, but it can also be incredibly detrimental should they fall foul of criminal activity.
“Unfortunately, it does happen more often than you may think, particularly for those attempting to verify a vast number of buyers on a manual basis.”
Read more: Majority of regulated firms planning switch to electronic verification – report.
Barnett believes that the majority of cases of failure to verify is an oversight due to stretched resources, rather than a cavalier attitude on the part of property industry professionals.
“However, it does demonstrate the value that can be gained from a professional approach, whereby one identity verification can then be used across every area of the transaction process and by multiple shareholders such as agents, solicitors, and mortgage brokers,” Barnett pointed out. “It also highlights the value of investing in a bona fide onboarding platform that will prevent any transaction from progressing should a buyer’s identity not be properly verified.
“Not only does this approach save time, money and resources, but it reduces the chance for criminal entities to utilise the industry to launder their ill-gotten gains.”
