Verification can be completed on the basis of documents, data and information which come from a reliable and independent source.

This means that there are a number of ways you can verify a client’s identity including:

1. obtaining or viewing original documents
2. conducting electronic verification
3. obtaining information from other regulated persons
4. Independent source

You need an independent and reliable verification of your client’s identity. This can include materials provided by the client, such as a passport.

Consider the cumulative weight of information you have on the client and the risk levels associated with both the client and the retainer.

You are permitted to use a wider range of sources when verifying the identity of the beneficial owner and understanding the ownership and control structure of the client.

Often only the client or their representatives can provide you with such information. Apply the requirements in a risk-based manner to a level at which you are satisfied that you know who the beneficial owner is.

CDD and Electronic verification

Electronic verification will only confirm that someone exists, not that your client is the said person.

Electronic verification may be sufficient verification on its own as long as the service provider uses multiple sources of data in the verification process.

You should consider the risk implications in respect of the particular and be on the alert for information which may suggest that your client is not the person they say they are.

You may mitigate risk by corroborating electronic verification with some other CDD material.

When choosing an electronic verification service provider, you should look for a provider who:

1. has proof of registration with the Information Commissioner’s Office to store personal data
2. can link an applicant to both current and previous circumstances using a range of positive information sources
3. accesses negative information sources, such as databases on identity fraud and deceased persons
4. accesses a wide range of ‘alert’ data sources
5. has transparent processes enabling you to know what checks are carried out, the results of the checks, and how much certainty they give on the identity of the subject
6. allows you to capture and store the information used to verify an identity.

When using electronic verification, you are not required to obtain consent from your client, but they must be informed that this check will take place.

While electronic verification can be a sufficient measure for compliance with money laundering requirements, there may be circumstances where it will not be appropriate. For example, the Council for Mortgage Lenders notes that electronic verification products may not be suitable for fraud prevention purposes, such as verifying that a person’s signature is genuine.