Over the past several months, many of our customers have turned to us asking for clarification and guidance regarding the newest ALTA Best Practices for Identity Verification. They want to know how to navigate the growing threat of seller impersonation and wire fraud while maintaining an efficient closing process. To address these questions, we wanted to put together this two-part series specifically covering the ALTA Best Practices and showing how CloseSimple can help your title company meet these crucial guidelines.
Given the continued rise of seller impersonation and sophisticated wire fraud, this updated guidance provided by the American Land Title Association emphasizes the critical need for title companies to adopt a "layered approach" to security that is appropriate to the risk level of each transaction.
Understanding the ALTA framework is the first step toward compliance.
The ALTA-Recommended Layered Verification Approach
ALTA advises that higher-risk transactions, such as those involving vacant lots or fully remote closings, require significantly higher vigilance. The Guidance outlines three key methods that must be used in a layered fashion to achieve comprehensive identity verification:
Layer 1: Verification of Government ID
This layer focuses on confirming the authenticity of the physical identification document itself.
- Action: Validating the physical document for authenticity and detecting manipulation.
- ALTA Methods: Checking for signs of tampering or manipulation, using automated security feature detection (like holograms and UV patterns), and utilizing tools that identify forged documents via print quality, font consistency, or photo replacement detection.
Layer 2: Database Verification of Personal Information
This layer ensures the claimed identity is real by cross-referencing provided data against authoritative third-party sources.
- Action: Cross-referencing claimed Personally Identifiable Information (PII) against credit bureaus, government agencies, and other authoritative databases.
- ALTA Recommended Elements: First Name, Last Name, Address, Phone Number, Date of Birth, and Social Security Number (or national ID).
Layer 3: Biometric Verification
This layer confirms that the person presenting the ID is the rightful owner, neutralizing the threat of spoofing.
- Action: Determining whether the person presenting the ID is the rightful owner using physical attributes.
- ALTA Methods: Utilizing a facial comparison between a live selfie and the photo on the ID, along with liveness detection to prevent the use of spoofing techniques or deepfakes.
The Importance of Staff Training
The ALTA guidance doesn't just focus on technology; it also emphasizes the human element of security. To maintain effective compliance, ALTA recommends conducting regular employee training on crucial security topics, including:
- Current impersonation schemes and red flags.
- Advanced document forgery detection techniques.
- Social engineering tactics used by fraudsters.
Adopting the right technology is essential, but ensuring your team is trained to use that technology and spot common schemes is equally vital.
Ready to see a fully integrated solution that meets all three layers of the new ALTA guidance? Schedule a demo of CloseSimple to see how we can help you meet ALTA Best Practices with our full suite of Fraud Prevention tools, and integrated Payment Solutions.
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