Why Law Firms Require Client ID
We are often asked by clients why they need to provide us with identification. This is usually because the individual has already shown their ID to their realtor, mortgage broker, lender, financial planner, accountant or various other professionals. In this article we will discuss the source of our obligation to confirm the identity of our clients as well as the types of acceptable identification.
The source of our duty as lawyers to confirm the identity of our clients is found in the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and the Rules of Professional Conduct (the “Rules”) which is prepared by the Law Society of Ontario. The scope of our duty depends on the nature of the legal matter. At a minimum, we are required to take reasonable steps to obtain and record information such as the client’s full name, address, phone number and occupation. If the legal matter is classified as a “financial transaction”, as defined in the Rules, we are required to verify the client’s identity by reviewing at least two pieces of valid identification from each client, at least one of which being government issued photo identification. If the name does not match exactly on the forms of identification provided (Ex. full legal name versus just first and last names) it may be necessary for the client to provide an additional piece of identification or to sign a statutory declaration (a sworn statement of facts) stating that they are one and the same person.
In most circumstances, we are required to keep a record of the client’s identification. We are required to comply with all applicable privacy laws in the storage of such records.
Examples or acceptable forms of identification include, without limitation, driver’s licence, passport, permanent resident card, Canadian citizenship card, and a birth certificate. In some cases, a credit card from a major financial institution may be acceptable as a secondary piece of identification. All forms of identification must be valid at the time of verification and must be signed by the client, if applicable. Please note that certain lenders have very specific requirements with respect to the forms of acceptable identification.
If a client is signing out of our office, additional steps are required. For example, if the client is signing elsewhere in Ontario or Canada, the individual verifying the client’s identification must sign and return an attestation confirming that he or she examined the client’s valid and original identification. If the client is signing outside of Canada, the individual verifying the client’s identification must enter into an agency agreement with our office. Our office then has a duty to take reasonable steps to satisfy ourselves through direct contact with the agent that the agent is who they claim to be.
The client identification process is important not only because we, as lawyers, have a legal and professional duty to comply, but also to protect ourselves and our clients from potential fraud. Accordingly, we take this process extremely seriously.
Please let us know if we can be of assistance with your current or future legal needs in the areas of corporate, commercial, real estate, matrimonial, civil litigation or wills and estates. We would love the opportunity to Simplify the Complicated for you!
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