How to Screen a Tenant: Identity Verification

Identity is often taken for granted. So much of our lives take place online that it can be hard to keep in mind the risks involved with online interactions. The cost of identity fraud has been rising in recent years according to a survey conducted by Javelin Strategy & Research. Identity fraud can lead to evictions which on average can cost a landlord $9,500 per incident. So a 2,000 unit portfolio is likely to lose $380,000 per year because of fraudulent applications.

Weak identity verification processes are contributing to the rising cost of identity fraud. That’s why identity verification is one of the most critical steps in a rental application. If you are a leasing manager or owner you can’t afford to make any assumptions about identity. Too many properties have fallen victim to their own weak identity verification processes. The problem is how to screen the renters?

Here, you will learn why identity fraud is so dangerous and how easily you can stop it by just using your smartphone.

Why Identity Fraud is So Concerning

So why might a prospective renters want to hide their identity? Often it comes down to the simple fact that the applicant is not qualified to rent the apartment they want. They may have less income than is required or no job at all. They might be trying to house more family members than is legally permitted for a unit or they might have problems with previous landlords that they want to hide.

Damage to Owners

Multifamily properties that fall victim to identity fraud can be damaged in many ways. Tenets with something to hide may not be able to pay their rent on time despite the best intentions. Others might use their residence to conduct fraudulent businesses or they might plan to not not pay rent knowing that if they skip town the property owner has no way to reach them.

A pernicious renter is a risk to the owner because damages may not be to your property alone. Landlords may be held accountable if a tenant’s bad behavior poses risk to other renters. If it can be found that the owner’s negligence caused damage to people or property it can result in significant headaches and losses.

A Best Practice

Even if your renter is not trying to harm anyone, it is still important to be certain of their true identity. It should be a key consideration when making the decision of whether or not to rent to an applicant.
Identity verification is essential to ensure that you are running your business efficiently while ensuring a fair and safe housing system for all. After all, you aren’t the only one who benefits from having trustworthy renters. So, make sure that for every application that comes in the door you are doing your part and verifying identity before you make a decision.

Getting Documentation

So now you know why identity fraud is so dangerous and why it is important, let’s talk about how to properly verify identity. Operators should ask for ID documents as part of an application and be on the lookout for fake IDs.

Fake IDs can be categorized into three main categories: Forged IDs, Altered IDs, and stolen IDs.

Forged ID

Forged IDs are those that are not created by the issuing authority, but are made to look like the real thing. These are specially created by people or non-legitimate businesses in an attempt to create a fake identity of a person.

Altered ID

These are real documents, but their information has been tampered with. For instance, the name or address may be changed.

Stolen ID

These are real IDs with no modifications, but they don’t belong to the person who presents them to you.

Be on the lookout for these types of fakes. Some municipalities will offer classes to teach business owners how to spot fake IDs. You can also pay for online training classes that will teach you how to spot fake IDs. Forgery techniques are always changing so be sure to stay up to date on new ways to spot forgeries. Each type of documentation has thier own unique characteristics and so each has a different way to spot fraud.

Documentation Types

Passport:

If your renters are not from the United States, you should ask them for their original passports. Check the original and keep the copies with you. Make sure it has a digitally printed photograph and a holographic overlay. Check the expiration date and make sure it is the right size (125 × 88 millimetres or 4.921 × 3.465 inches). Check that it has the proper security features. Each country has its own set of features and you can look them up in the public register of authentic travel and identity documents online.

Drivers License:

Make sure the photo is clear and obviously make sure the picture matches the person you are leasing to. Check the expiration date and make sure that the lamination is not peeling. Look for a holograph to ensure it is legitimate. Many cards have microprint - printing so small it appears as a solid line to the naked eye. You can purchase 10x magnifiers that allow you to inspect the microprint for authenticity.

Work Documentation or ID:

Income and employment verification is an important check on an applicant’s identity. VERO has a complete guide to verifying employment here.

National Identity Card:

Over one hundred countries, including many major Western democracies, issue national identification cards. These cards will confirm the applicant’s real name, address, and may have other identifying information.

Previous Rental Contracts:

Applicants who have constructed a fake identity may change their methods for each victim. So it’s a good idea to ask for a previous rental contract. This will ensure they are not lying about their name, last address, and time spent living there.

Important Policies to Remember

Collecting all these documents from your applicants will help you to reduce the risk of application fraud. The more documentation you collect, the better chance you have of spotting a fraudulent application. Because fraud is always evolving and because your leasing managers are subject to human error, it is important to create a process with multiple checks to verify identity.

Running a profitable multifamily property means putting in place practices that reduce risk. So when conducting identity verification, be sure that you establish a standard operating procedure that you can follow every time. Train your staff to do the same and be sure that you have more than one staff member who is trained to identify fraudulent documents.

Remember to ask for identification from each applicant. You should never rely on the information of just one or two people when a larger group is involved. Ask for this document from each of them and if they refuse then do not accept the application.

Stop Identity Fraud with New Technology

If all of this sounds like a lot of work, that’s because it is. Taking this kind of precaution in your application process requires days of back and forth with the applicants and many hours of regular security training for your leasing managers. That’s why many multifamily operators are turning to revolutionary new technology like VERO that can streamline the identity verification process while eliminating human error. With consumer fraud on the rise and reaching $3.3B in damages in 2020, it’s easy to see why multifamily properties are using VERO to eliminate identity fraud.

VERO Snap is a secure and easy product that verifies the identity of your prospective tenants. It automates all the work outlined in this article and does it all instantly so you don’t have to wait for days to get the information you need to make a decision. With VERO Snap there is no need to double-check documents, upload them and manage the files, and you don’t need to call around to verify information.

Snap stops identity fraud before it happens. Simply add Snap at the start of your online application process and future renters can verify that they are who they say they are in two easy steps. First, applicants use their smartphone to snap a picture of their driver's license, passport, or other identifying documentation. Then they take a selfie. Snap does all the rest. Using VERO’s technology Snap is able to instantly verify the authenticity of the document and match it to the selfie. In your leasing software you will receive instant verification that the applicant has passed the identity verification process. ​​

In addition to ID verification, VERO’s proprietary technology can also verify an applicant’s income, assets, employment, rental history, and more. This gives you a complete picture of the applicant and reduces the risk you take on every lease that you sign.

Conclusion:

In today’s competitive leasing environment it is more important than ever to reduce risk by stopping application fraud at its inception. Leasing and application technology is now a fundamental tool in the fight against application fraud. There is a lot of work involved in screening renters and when done properly a multifamily property can enjoy profitable operations. Streaming the screening process with verification technology further improves outcomes and leads to an even more profitable and safer operation.