Title insurance firm FCT and Interac have teamed up to create a digital identification verification service for real estate professionals, which the two companies say will help reduce ID fraud.
The Interac Verified credential service eliminates the need for real estate agents, lenders or lawyers to obtain and keep copies of sellers’ or buyers’ IDs, says Michael LeBlanc, CEO of FCT.
Interac Verified “fits nicely in line with what we’re trying to do in providing tools for the real estate industry to support their efforts, not only in combating fraud but also in leading the ongoing compliance obligations that they have.”
LeBlanc says Realtors, lenders and lawyers will be able to use the app to validate that the people they are dealing with are who they say they are.
A rise in real estate schemes
Fraudsters have gotten significantly more sophisticated at producing authentic-looking documents and can get fake driver’s licenses or even passports for as little as $20, LeBlanc notes.
In general, title insurers see fraud during closings of real estate transactions. Either someone impersonates a homeowner to obtain a loan, or impersonates a homeowner and lists and sells their property, unbeknownst to the actual owner.
While LeBlanc hasn’t seen many AI-driven frauds, there’s “no doubt there will be. There’s no question that that’s another tool in the toolbox for potential fraudsters.”
How the service works
Under the service, users can create a reusable digital credential using a bank login with a participating financial institution, an accepted form of government-issued ID and a biometric photo.
Buyers or sellers take a selfie on their phone “and we’re able to match both the physical characteristics as well as the information that’s on the document,” LeBlanc says. “We can validate whether it’s an actual true document or whether it’s forged.”
Given that the app has access to both Interac information and government records via membership in the Digital Identification and Authentication Council of Canada, it can compare the information it receives with what the government holds.
Consumers go into the app and download their information directly onto their cell phone. No third party sees or keeps the ID data.
“You’re maintaining it for yourself,” LeBlanc says. “From a privacy perspective, you can see how important that is.”
Real estate agents, lawyers or lenders will not see an actual ID but will obtain a verification that the ID is authentic.
Users of the service will get a notification on their phone saying they’ve been verified, which they can then present to anyone who is required to confirm their identity.
Better protection for consumers, fewer risks for professionals
LeBlanc says the goal of the digitized tool is to provide better protection of consumers’ personal information and to create a risk-free process for real estate and other professionals.
Teaming up with Interac is a huge boost for the verification service, he says. “Interac is a well-known, trusted brand in the marketplace” that can’t be beat for name recognition. “Everybody knows who Interac is. They probably have a bank card, so they know how it works.”
Interac is already used by financial institutions and the government to verify customers through their bank accounts, “so (customers) won’t have as much concern about providing the information as they might otherwise,” he says.
“The credential is just that much stronger, we believe, and that’s why we partnered with them.”
Working toward partnering with real estate boards
As it now stands, homebuyers produce ID at least three times: with the Realtor, when they engage with the lender for a mortgage, and with the lawyer who is completing the transaction.
However, consumers are becoming much more wary about producing their IDs for copying.
Discussions are underway with several real estate boards and lenders across the country to implement IVS.
“It’s obviously a lot easier to educate real estate agents if you work through the board and use some of their educational programs, versus going office by office, broker by broker, agent by agent.”
LeBlanc notes FINTRAC has been much more aggressive in ensuring parties involved in real estate transactions are compliant when dealing with verification processes.
Interac Verified aims to streamline the verification process for real estate professionals and protect consumers’ personal information, he says.
LeBlanc hopes to be well underway in offering Interac Verified across the country by the fall. “We anticipate that this will scale up fairly quickly,” he says.
Danny Kucharsky is a contributing writer for REM.