We all had to make adjustments during the pandemic. During the pandemic, when offices across the province ran with a skeletal staff and moved virtually where possible, lawyers had to find new ways of verifying client IDs.
This meant getting creative. When we could not hold a piece of ID in our hands, we quickly pivoted to accepting a scan or photograph of the ID, and then usually saw the client over video conference to confirm that they matched their photo.
It worked in a pinch. Those days, though, are soon coming to an end.
The Law Society of Ontario (“LSO”) announced on September 29, 2022 that effective January 1, 2023, all lawyers in Ontario will be required to use a third-party authentication service in order to verify client identification.
From the Law Society’s official release:
Effective January 1, 2023, licensees who choose to verify the identity of an individual using video conferencing technology or other forms of virtual communication will be required to authenticate the government-issued identification document. Verifying identity by only viewing an individual and their government-issued photo identification will no longer be permitted. This change realigns virtual verification requirements with the requirements detailed in Part III of By-law 7.1.
Licensees may assess the authenticity of the government-issued photo identification document by:
So, why is this happening, and what does it mean for your practice?
There was a time before the internet where lawyers had intimate relationships with their clients. The county lawyer was a pillar of the community and had countless friendships with the same population that they served.
Today, with the changes in technology and more and more firms operating virtually, most lawyers no longer build their practices off of those pre-existing relationships. In fact, lawyers are frequently retained by clients they have never met, and will likely never meet face to face.
While the move towards digital practice helps remove barriers inherent in access to justice, it also creates a tremendous amount of risk, and that risk is not insignificant. The Commission of Inquiry into Money Laundering in British Columbia, released by the Cullen Commission this past June, has revealed that money laundering in Canada was estimated at over $46.7B in 2018. While not the only culprits, the report noted that lawyers played a significant role in, likely unknowingly, facilitating those frauds.
The COVID-19 pandemic only made things worse. According to a 2021 report from TransUnion of Canada, attempted identity fraud in the financial sector escalated during the pandemic by over 150%.
Of course, lawyers are not entirely to blame for bad actors, but the rules around privilege and confidentiality mean that those in the profession are at constant risk of being exposed to bad actors, and similarly at risk of being involved in unsavory dealings. Fraudsters are becoming smarter, and the tools we relied on for decades no longer offer those same protections.
Banks, insurance companies, and even casinos and gaming facilities use third-party ID authentication services for some time. ID authentication performs a high-level analysis against an ID, verifying its authenticity while simultaneously making sure that it was not on a list of stolen or compromised IDs, and that it does not belong to an individual that you would rather not be dealing with in the first place.
These measures may not eliminate fraud entirely, but they are key to helping reduce instances. They are the best measures in place for preventing identity fraud, and they are the best measures that you can put in place to keep fraudsters out of your practice.
We designed Vaultie because we saw this problem coming, and knew that there had to be a better solution. Even prior to the pandemic we knew that online verification of IDs was imperfect at best, and even if someone had a great fake ID you could never fully guarantee that they were the same person signing key documents.
Vaultie corrects this problem in two ways.
First, our authentication platform verifies the IDs that your clients are providing digitally. We offer bank-grade client identification that’s been tested against the best forgeries in the world. We work to ensure that your potential client is who they say they are so that you know exactly who you are dealing with.
Then we take things a step further. We encrypt all confidential documents to a blockchain, which prevents unwanted parties from accessing sensitive information. This also lets us confirm that the person signing the document is exactly who they say they are.
Blockchain lets us track the chain of custody of any document from the moment it leaves your computer to the moment it returns fully executed. Only you, your client, and anyone else you have chosen can view or sign your document, and you can confirm without question that the document has not been edited or tampered with in any way.
We’ve worked hard to make the change to Vaultie as simple and easy as possible. We can gladly assist you via video conference in helping you move your processes over to the smoothest KYC (Know Your Client) compliance tool in Canada. You can also message us through our website at any time.
Your clients will need to adjust to the new requirements, but we’ll help facilitate that education process as well.
Contact us today to set up a no-obligation demonstration to see how it all works. We’re here to help you learn how easy it is to make your practice one of the safest and most secure for clients in Canada.