Since my post of 1 October 2014, it has been suggested that one way to verify a potential borrower's identity is to use the Commonwealth Government Document Verification Service. See: http://www.bransgroves.com.au/news-alerts/identification-of-borrowers.html
That system enhances the ‘100 points test’ by verifying whether government-issued identification documents match a genuine document issued by a State or Federal government.
Key document details are entered for electronic checking through the DVS hub. What comes back is a simple Yes or No.
The author noted above suggests that the Land Titles Offices ("TO") may argue that a failure to perform a DVS check was not taking reasonable steps.
The TO may use this as an excuse to avoid paying compensation for forged mortgages under the Compensation Scheme.
The author concludes that given that the DVS information is available, and given the emphasis on constructive notice in the cancellation provisions, it is possible that the courts will agree. Accordingly lenders should consider incorporating a DVS check into their identity checking.
I agree with the author's conclusion.