Nature of Evidence


Electronic verification is now a major tool of the verification process across all regulated sectors. The guidance notes inform that for the verification process firms can use documents, electronic verification or a combination of both.

There is a hierarchy of reliable sources of documentation or information for verification. The Guidance notes state;

“Documentation purporting to offer evidence of identity may emanate from a number of sources. These documents differ in their integrity, reliability and independence. Some are issued after due diligence on an individual’s identity has been undertaken; others are issued on request, without any such checks being carried out. Therefore there is a broad hierarchy of documents:

  • Certain documents issued by government departments and agencies, or by a court; then
  • Certain documents issued by other public sector bodies or local authorities; then
  • Certain documents issued by regulated firms in the financial services sector; then
  • Those issued by other firms subject to the ML Regulations, or to comparable legislation; then
  • Those issued by other organisations.

In many instances ID theft is committed by the theft or forgery of documentation, firms should recognise that some documents are more easily forged than others. Utility bills, for example, are in the lowest category. These are ‘documents on request’ that is no real checks are done to ascertain by these companies that the person named on the bill is the person it is supposed to be. They have not been subjected to any anti-money checks, whereas a credit card statement or a bank statement issued by an FSA regulated firm will give you more certainty that it is that person you are dealing with. Utility bills should not be taken as a general rule for verification purposes unless backed up by ‘personal knowledge’ of the applicant. If paper is your preferred route of verification where possible try a bank or credit card statement, not a utility bill. If suspicions are raised in relation to any document offered, firms should take whatever practical and proportionate steps are available to establish whether the document offered has been reported as lost or stolen.”

Your firm will have a range of procedures in place to cope with the different circumstances and complexities posed by the verification of different entities or types of clients. However they are all based around the simple ‘KYC’ requirements discussed in this section.