Identify or lose your mortgage
On 24 September 2014 Victoria became the latest state empowered to cancel mortgage registration if the lender failed to take reasonable steps to identify the borrower. Queensland, New South Wales already have these laws in place and steps in the same direction have been taken in South Australia and Western Australia.
Reasonable steps may mean using DVS
The Commonwealth Government threw open private access to Document Verification Service in March 2014. The system enhances the ‘100 points test’ that previously required lenders to manually scrutinise government-issued identification documents. It does this by verifying whether the variable information matches a genuine document issued by a State or Federal government.
Key document details are entered for electronic checking through the DVS hub. What comes back is a simple Yes or No. It is estimated that the hub will process 30 million checks in 2015.
Bransgroves believes that the Land Titles Offices will argue that a failure to perform a DVS check was not reasonable steps. They will use this as an excuse to avoid paying compensation for forged mortgages under the Torrens Assurance Scheme. Given that the DVS information is available, and given the emphasis on constructive notice in the cancellation provisions, it is likely the courts will agree. Accordingly lenders should consider incorporating a DVS check into their identity checking.
How to access DVS
Organisations that have been approved as Gateway Service Providers for the DVS are listed below.
DVGL Pty Ltd Offers a web based portal.
Edentiti Pty Ltd Offers a web based portal or integration with lender’s own systems via API.
Global Data Company Offers a web based portal or integration with lender’s own systems via API or XML frame.
Veda Advantage Limited Offers a web based portal through its IDMatrix service.
Zip ID Pty Ltd Use DVS as part of their face-to-face identity verification service (metropolitan Western Australia, South Australia and Victoria) plus offers a mobile app.
Bransgroves Lawyers has no interest in, or association with, any of these companies.
4 Registrar-General’s Verification of Identity Policy, 24 June 2013.