6.4 – Client Identification Versus Client Verification

Understanding the difference between identification and verification is important. If you are conducting identification, you review the identification documents and keep notes of the client’s name, address, telephone number and occupation but do not photocopy and retain the document except with express consent by the client. If you are conducting verification, you are required to make and keep copies of the documents.

Further, the Client Identification Rules (Rules 1541 – 1542) and the Client Verification Rules (Rules 1543 – 1546) apply at different points in a retainer.

Client Identification

You are obliged to know your client, understand your client’s financial dealings in relation to a retainer, and manage any risks arising from the professional business relationship with your client. You must identify your client in every new retainer. See Rule 1541.

The Client Identification Rules require you to obtain and record basic identification information about individuals or organizations.

Client Verification

You do not have to verify your client in all retainers. Verification requirements only arise when you receive, pay, or transfer funds on behalf of a client, or give instructions for such activities on behalf of a client. There are certain exceptions to these requirements which will be covered in this module. For instance, the client’s payment of your fees and disbursements is not a transaction that triggers the obligation to verify your client.

For client verification, the information you must gather goes beyond obtaining basic identification. You must make reasonable efforts to obtain and retain copies of information that can be used to confirm the identity of the client.