How Electronic Notarization Helps Prevent Identity Fraud?
In an electronic notarization process, an electronic notary (notary public) authenticates electronic documents such as PDFs and word documents. It uses a digital signature and notary seal to notarize these documents then validates them with a notary certificate. After this, the document is tamper-evident, and any illegal attempts to access and alter it is easily detected.
The Need for Electronic Notarization
In light of the coronavirus pandemic, almost every business has only one option-digitize. Parties aim to incorporate alternative methods of operating their businesses and closing transactions without face-to-face interactions. Almost one year into the pandemic, companies that have successfully implemented platform-based models and digital transformations are thriving. All the same, the issue of document forgery and identity fraud has become overly rampant. This defines the need to facilitate secure identification and effective e-commerce transactions. Consequently, electronic notarization has become crucial to facilitate electronic commerce while combating fraud by enhancing robust security. With e-notarization, online transactions are more reliable, safe, and secure.
What is Remote Online Notarization?
Remote Online Notarization (RON) employs audio and visual technology to complete the notarial process with the parties in different locations. RON has become rampant in mortgages where the borrower and the notary hold a live video conferencing via a webcam session. The notary then authenticates the borrower’s documents virtually. With the disruptions caused by the Covid 19 pandemic, the need for RON has become apparent in the mortgage world. Lenders have seen the need to embrace this technology to enable secure contactless end-to-end mortgage closing.
The Process of Electronic Notarization
Step 1. Credential Analysis
A signer should fast capture the front and back of their ID in a photo using a phone or a laptop camera. The ID is thoroughly scrutinized by automated software to ensure that the information provided is valid.
Step 2. Knowledge-Based Authentication
After verification, the signer is required to log in to a meeting. They do so by entering their name just as it appears on the ID, their address, and birth date. The signer must also provide the last four digits of their United States Social Security number as well as a recent US address. All this is needed to initiate the Knowledge-Based Authentication (KBA) process, which leverages personal information and experience to prevent identity fraud. There are two common types of KBA -static and dynamic. In both cases, the signer must answer some questions to prove their identity.
What is the Key to a Good KBA Question?
A compelling static question should align with the following criteria:
- The question should be suitable to a wide range of the population.
- The question should be easy to remember
- There should be only one answer to the question.
- The question should be unique and challenging to answer from mere research or guesswork.
When it comes to Static KBA, new users must answer numerous fixed questions based on their personal life and experiences. In most cases, the signer is allowed to preselect the questions they would like to answer. The host then pairs the questions to their provided answers and uses them to authenticate the signer’s identity. Static questions can be factual, like “where did you grow up?” or “How many pets do you have?”
The main concern about static KBA is that nowadays, most people share too much of their personal information on Facebook or Gmail. If a fraudster gets access to such basic data, they can easily impersonate you and fool the static KBA.
Dynamic KBA majorly depends on third-party databases with reliable public information to device numerous questions with a wide range of correct answers. The questions include everything and anything about the signer and are very easy to answer when you are legitimate. The signer has to answer at least five questions correctly within two minutes. Should they fail, they are given a second trial. However, if they fail in the second attempt, they are blocked for twenty-four hours and are presented with a new set of questions for every new trial.
Step 3. Notary Review
In this phase, the signer connects with the notary on an online video meeting. The notary reviews the KBA results and identification analysis. They also match the signer’s face on the video with that on the ID as the final part of verification to prevent real estate fraud.
Identification fraud can significantly impact the orderly running of a business enterprise. It also poses a danger to an individual’s property rights as such e-notarization shields the public from treacherous identity and document schemes.