Attorneys – be aware – fraudulent identities can introduce legal exposure to your work.
According to the Federal Trade Commission, an independent agency of the United States government whose principal mission is the enforcement of civil U.S. antitrust law and the promotion of consumer protection, identity fraud losses climbed to $56 billion in 2020, a 73% year-over-year increase from 2019.
Identity fraud is clearly a growing challenge for businesses and law enforcement. Today, professional fraudsters take a single ID card and make thousands of fake versions that will defeat most attempts at detection by humans. Synthetic fraud involves combining a stolen social security number (or other national IDs) with fake information – typically a false name, address, birth date and phone number in order to create a false identity.
The Remote World is Here to Stay
The legal profession, like most business sectors, finds itself doing ever-increasing business remotely. Clients are not always a short car drive away. The COVID-19 pandemic has been accelerating and normalizing remote business interactions and transactions more and more.
Video meetings are here to stay. Companies are hiring employees remotely. Business transactions are being signed and implemented with the principles multiple time zones away from one another.
PDF Signatures Are an Intolerable Risk for the Legal Profession
When it comes time to sign documents and verify identities, the current common practice is to send a PDF document to the other side to sign. Zero security and zero identity validation. The practice of sending PDF documents to clients is a risky practice that’s days are numbered.
Proper identity verification is no longer a luxury for the legal profession, it is an essential part of the attorney tool kit.
Legal Identity Verification Scenario 1:
Contract Between Two Parties
Let’s take a look at a very common scenario that attorneys come across on a daily basis – a contract between two parties. Two sides are asked to sign a document remotely. Even if all parties to the agreement are acquainted, how can the attorneys representing the sides be sure that their client and the other side actually signed the agreement? The attorneys on both sides should want to 100% verify who is who.
Legal Identity Verification Scenario 2:
Investing in a Business or Startup
When someone or a group of people invest in a new or existing business, they want to know that the person they are dealing with is indeed who he or she claims to be. They may also want to know if the other party is legally exposed and if so, to what extent. In many cases, investors ask for PII a few times during the investment process – when they first meet and again before wiring funds.
It is currently the norm to sign investment agreements via PDF or photocopied (often using a smartphone) contracts.
PDF’s can’t verify identities. Consider the costs if and when people cheat or scam investors. The solution that I will lay out below costs a tiny fraction of this.
“When someone or a group of people invest in a new or existing business, they want to know that the person they are dealing with is indeed who he or she claims to be. They may also want to know if the other party is legally exposed and if so, to what extent. In many cases, investors ask for PII a few times during the investment process – when they first meet and again before wiring funds.”
Legal Identity Verification Scenario 3:
Employee-Employer Contacts
Thanks to COVID-19, many employers are running their candidate interviews and hiring processes entirely via video conferencing. The two sides finally meet on the new employee’s first day of work. The employer is of course calling references and Googling candidates, but there is no official “authenticated identity” report out there, besides the old-school and in-person notary.
Or is there?
The Simple and Inexpensive Identity Solution for the Legal Profession
Let’s revisit all of the 3 above legal scenarios which required identity verification. The moment that one party requests an identity verification, here is what I propose:
- 01
The party requesting an identity verification emails or sends the other party a link.
- 02
The person or people whose identity verification is requested receive a link and click on it.
- 03
They perform a few identity verification steps which can include any or all of the following:
- Present 1 or more commonly accepted IDs
- Take a selfie and compare it to the IDs provided
- Check ID for AML exposure
- Age verification – is the person over 18 or 21 or any age requirement
- Synthetic fraud – does the person’s identity belong to any mass-produced fraudulent IDs?
- 04
A result is delivered in 8 seconds or less. Both sides see the results and 3 things can happen:
- A positive identity verification – whatever is pending may move forward.
- A negative identity verification – attorneys can save their clients literally millions of dollars when fraud is prevented.
- Inconclusive results – a tailor-made playbook of pre-determined scenarios may be activated.
How much will identity verification for attorneys cost? The cost is so low, I wouldn’t let my own client publish it online. Let me rephrase it:
How much will it cost you, your firm and your clients not to verify identities over the span of your career?
AU10TIX powers the identity verification of many of the world’s leading companies. Our solution can help take the legal profession to the next level when it comes to digital integrity.
If your law firm or legal business can benefit from identity verification, I hope to hear from you! Fill out the below form and we will get back to you.
As an attorney, I am always skeptical of “new and amazing solutions”. When it comes to identity verification, I am 100% convinced that, by verifying identities as a routine legal practice, the legal profession can contribute to making business safer and more accessible than ever.
