Digital identity service trial for residential property transactions

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A new digital identity service is being trialled around the UK in a move which is expected to help reduce residential property fraud. The MyIdentity scheme brings together five major identity providers on a single online platform.

Using the service home buyers and sellers will be able to prove their identity once, instead of being repeatedly asked for their details by all the parties to the transaction, which include estate agents, lawyers and mortgage lenders.

The scheme is expected to result in faster property transactions and to give buyers and sellers more control over how they share their identity details. It has been designed to be in line with the Department for Digital, Culture, Media and Sport’s plans to create a framework with standards for digital identity.

The move is also expected to provide greater security to property professionals who have been facing increased risks of identity and mortgage fraud. The 2018 Dreamvar v Mishcon de Reya decision held that conveyancers acting for the buyer can be liable in cases of identity fraud, as well as the solicitors acting for the seller. This was despite the identity checks on the fraudster being carried out by the seller’s solicitors, and therefore any negligence in performing these checks being on the part of the seller’s solicitors and not the buyer’s solicitors (who effectively were just in the wrong place at the wrong time).

The initial identity providers using MyIdentity include Digidentity, Nuggets, OBiD, Thirdfort, and Yoti, with more service providers expected to join the pilot later this year. The platform uses technology provided by UK company Mvine and the service is being coordinated by Etive Technologies.

The pilot will run across eleven UK locations including London, Cheltenham, Gloucester, Harrogate and York.

James Burgoyne, Divisional Director – Claims & Technical of Brunel Professions says: “This is potentially good news for conveyancing solicitors. The Dreamvar decision meant that solicitors acting for a purchaser can face liability themselves if a fraudulent seller is not identified by the seller’s solicitor’s checks. Steps which can reduce this exposure would be welcomed by both solicitors and their PI insurers.”

He added: “In the PI world we are focussed on liability and the exposures it creates, but it’s important not to lose sight of what a horrendous experience such a fraud must be for a victim of the fraudster; this is a welcome step in reducing these frauds and protecting the buyers of property.”

Further information is available at the MyIdentity website. Reports about the development have been published by Propertymark, The Negotiator, and Today’s Conveyancer. Details of the Dreamvar decision were published by Today’s Conveyancer.

Brunel provides a wide range of Professional Indemnity Insurance broking services to property professionals. Click here to find out more or call Mark Sommariva on 0203 475 3275.