Face-to-Face VOI Update

ARNECC statement on VOI during COVID-19

ARNECC have released a statement relating to Verification of Identity (VOI) in light of current concerns around the face-to-face regime.

This statement reflects the current rules relating to VOI, and is not a change or relaxation of the regime.

However it is a refreshing reminder that despite the Verification of Identity Standard requiring a face-to-face (in person) identity verification process, lenders can continue to verify the identity of a borrower in some other way that constitutes the taking of reasonable steps.

This is a crucial point during the current COVID-19 crisis, but will remain an important one post-pandemic in an ever expanding digital world.

What constitutes reasonable steps?

It is important to note that there is no separate definition of reasonable steps, and it is up to the lender to determine that they have adequately verified the identity of the borrower/mortgagor.

By electing not to follow the VOI Standard, the lender has shifted the burden of proof to themselves should the mortgagor's identity be later disputed - rather than being deemed to have taken reasonable steps had they followed the standard.

So it is up to the lender to satisfy themselves that they will be able to later prove they took reasonable steps, and understand that it will depend on the facts specific to those circumstances. Therefore it is crucial that the lender retain all records for every VOI, and preferably maintain a consistent and robust approach across their operations that can be referred to where challenged.

While this may include technologies similar to Skype, it may equally involve other approaches that link the mortgage execution to the mortgagors identity.

VOI is not AML

It is important for lenders to keep in mind that VOI is not simply another KYC/AML check with a face-to-face element thrown in for good measure.

Once a lender has confirmed the identity of their prospective borrower during the credit approval stage, the purpose of the VOI regime is to ensure that the person behind that identity is the one that actually signs the mortgage.

So when designing a robust VOI process outside of the VOI Standard, lenders need to ensure that they can prove the link between the identity and the actual mortgage execution.

Simply conducting a Skype interview at some point prior to the mortgage being signed, may not be reasonable steps.