By James Rogers

Remote online notarization (RON) has emerged as a vital technological innovation, especially in the digital age where convenience and security are paramount. The traditional notarization process, which requires physical presence, has long been susceptible to various forms of fraud, including identity theft, document tampering and impersonation. By leveraging digital tools and security measures, RON significantly reduces these risks and enhances the integrity of the notarization process.

RON can help today’s title agent mitigate fraud risks, providing a secure and efficient alternative to traditional notarization. In this blog, we suggest some simple explanations you can share with customers to encourage their adoption of RON for their next closing.

Fraud risks in traditional notarization

Traditional notarization methods have been prone to several types of fraud:

• Identity fraud: Impersonation is a common issue where an individual pretends to be someone else to execute a document fraudulently. Traditional methods often rely on visual checks of IDs, which can be circumvented with high-quality forgeries. The naked eye cannot detect the digital tools in the ID that could otherwise thwart fraudsters.
• Document tampering: In traditional notarization, there is a risk of documents being altered before or after notarization, especially when dealing with physical copies.
• Coercion and duress: In some cases, signers may be under duress or coercion, which might go unnoticed in a face-to-face interaction, especially in situations where the notary is not trained to detect such scenarios.

Understanding RON

RON is a process where a notary public performs notarizations using digital tools while the signers are in different locations. RON is typically conducted through a secure platform that enables video conferencing, electronic signatures and the verification of identity through various technological means. The process involves several key steps:

• Identity verification: RON platforms use multifactor authentication (MFA), including credential analysis and knowledge-based authentication (KBA) questions, to verify the identity of the signer. These methods are more robust than simply relying on a government-issued ID presented in person.
• Secure digital platforms: The notarization process is conducted over encrypted communication channels, ensuring that the session cannot be intercepted or tampered with.
• Digital recordkeeping: RON sessions are recorded and stored, providing a verifiable record that can be referenced in the event of a dispute or investigation. This digital trail is a significant deterrent to fraudulent activities.

Mitigation of fraud risks through RON

RON offers several mechanisms that directly address these fraud risks:

• Enhanced identity verification: RON’s use of multifactor authentication significantly reduces the likelihood of identity fraud. The process typically involves real-time verification of government-issued IDs through third-party services that check against official databases. Additionally, knowledge-based authentication requires the signer to answer personal questions that only they should know, further securing the identity verification process.

• Tamper-evident technology: Documents notarized through RON are often electronically sealed with a digital certificate. This technology makes any alterations after the notarization immediately detectable, as the digital signature would be invalidated if the document is changed. This ensures that the document remains unaltered from the time of signing to its final use at closing.

• Auditable digital records: The entire RON session, including the video and audio of the interaction, is recorded and stored securely. This creates a verifiable audit trail that can be used to resolve disputes or investigate fraud claims. The knowledge that these interactions are recorded acts as a strong deterrent to fraudulent behavior.

• Remote nature reduces coercion risks: The remote nature of RON can reduce the risk of coercion, as the signer is not physically present with any potential coercers. The notary, who is trained to identify signs of duress, can also ask the signer to confirm their willingness to proceed in a secure environment, which can be more easily controlled compared to a face-to-face meeting. The video recording of the session also allows for later review by professionals trained to identify signs of elder abuse or other coercive techniques. RON also does not place agency staff face to face with a potential fraudster. This keeps them safe and gives them a chance to cancel the closing when the fraud is discovered.

3. Transactions involving divestment of the property from the federal estate tax lien.

Legal and regulatory framework

The effectiveness of RON in mitigating fraud is also supported by a robust legal and regulatory framework. Many states in the U.S. have enacted laws that set stringent requirements for the technology and processes used in RON. These laws mandate the use of specific identity verification processes, secure digital platforms, and the retention of records, all of which contribute to fraud prevention. During the COVID-era shutdowns, RON allowed closings to proceed, and many additional states added RON-enabling legislation to their statutory framework.

Moreover, RON is subject to oversight by regulatory bodies or executive offices that ensure notaries comply with established standards. This oversight, combined with the transparency provided by digital records, creates an environment where fraudulent activities are less likely to succeed and more likely to be detected if they occur.

Conclusion

RON represents a significant advancement in the fight against notarization fraud. By incorporating advanced identity verification, tamper-evident technology and secure digital records, RON addresses many of the vulnerabilities associated with traditional notarization methods. As the adoption of RON continues to grow, it is likely to become the preferred method for notarization, offering enhanced security and convenience in an increasingly digital world. The ongoing development of legal frameworks and technological innovations will further bolster RON’s effectiveness in mitigating fraud risks, ensuring that notarized documents remain reliable and trustworthy. Help your customers learn as much as possible about RON and its fraud-fighting capabilities. Protect the consumer from fraudsters with RON at all your closings.

James Rogers is Vice President, Regional Underwriting Counsel for the Mountain Region of Doma Title Insurance, Inc.