To help prevent illegal financial activities, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) recently changed REALTORS®’ individual client identification obligations. There are now three methods for identifying individuals under the law: the single process, dual process and credit file method. The transition period for older ID methods expires on January 23, 2018, and the new methods must be used starting January 24, 2018.
The changes focus on how to verify a client’s identity. The processes are summarized in CREA’s compliance resources here.
Single process method
Requires only one step to verify a client’s identity. You can use a federal or provincial (or foreign equivalent) government-issued photo ID. For a list of acceptable ID, click here.
Dual process method
Requires the Realtor to refer to information from two different and reliable, independent sources that contain current and valid information about the clients, in one of the following three categories:
- name and address (e.g., a utility bill),
- name and date of birth (e.g., a CPP statement of contributions), or
- name and confirmation of a financial account (e.g., a credit card statement).
Credit file method
Requires the Realtor to verify that the client’s name, date of birth and address match information obtained from a Canadian credit bureau, and that the information has been in existence for at least three years.
The same category can’t be used twice. For example, you can’t use two utility bills to ID a client. The client doesn’t have to be present if you use the dual-process method or the credit file method.
The new methods for identifying clients are detailed in full on the FINTRAC website.