Monday, 23 June 2008

Identity checks made simple - but what does it mean for consumers?

We are all familiar with the identity checks that banks and other financial services providers deploy whenever we wish to open a bank account, apply for a loan or register with a financial advisor.

In a number of cases, a lot of these so-called 'checks' require the customer to send copies of personal documents (utility bill, bank account statements, copy of driver's licence), details of which could be easily stolen, copied or intercepted and used for fraudulent purposes.

UK-based GB Group believes it has come up with the answer with its electronic identity verification service, eIDV, which enables financial advisors, accountants and solicitors to electronically check an individual's identity against a number of databases, including credit files, the electoral roll, telephone and sanctions data.

eIDV is based on GB Group's document checking technology, URU, which it jointly developed with British Telecom. URU not only validates utility bill and passport information, but also checks for alerts on Politically Exposed Persons and Bank of England sanctions lists.

Once a customer's information is validated, they are presented with an instant pass, fail or refer result based on a scoring methodology suited to the practitioner using the eIDV web portal.

A good thing about the solution is that it enables practitioners to more easily complete identity checks without compromising the safety of valuable personal information and to comply with more stringent anti-money laundering regulations, all in the one application.

However, it does highlight the 'Big Brother' culture that is growing up around anti-fraud prevention. Much like a police officer can type your name into a computer and come up with a list of previous offences and convictions, as well as checking you are who you say you are, financial service providers and advisors now have similar capabilities.

The question is how judicious are these providers likely to be in their scoring of individuals, and how transparent is the scoring process in terms of informing a customer why they have failed the identity check or scored a 'refer'?

With "Spot the Fraudster" as the marketing spiel for URU, it reminds me of UK TV Licensing Ads where they claim to be able to track you down if you haven't paid your TV license.

While eIDV may be great for financial advisors and other firms that need to validate a customer's identity and comply with onerous money laundering regulations, the question is what does it ultimately mean for the customer?

If their personal details are not stored on the databases eIDV checks, for whatever reason, does that necessarily mean they are not who they say they are?

1 comment:

Anonymous said...

I run the UKs largest Identity Fraud prevention service called "Verify Identity Ltd" , I run Verify via the 12000 branches of the UKs Post Office network. Verify is based on actual face-to-face identity and signature witnessing and complies fully with AML rules for enhanced due diligence.No Law Firm should depend on electronic "identity checks" as these only prove existance not identity (see Law Society handbook 2008).

S Clifford