Why Every Management Company Needs to Verify Prospects’ IDs Before Touring

Requiring prospects to provide a photo ID before touring has been a common practice at apartment communities in the multifamily industry. This is done as a security measure to protect leasing staff against criminal attacks.

When presented with an ID, the staff usually perform a quick visual scan to confirm that the prospect is actually the owner of the ID and then place the ID in a desk drawer while the tour is happening.

While keeping prospects’ IDs in a desk drawer has been the common practice, it does very little to protect the leasing staff’s safety, and on top of that, owners’ investments post tour.

Most of the time, the IDs provided by prospects are not verified for legitimacy, which means prospects with false identities can get approved for housing. Not verifying prospects’ identities, therefore, leaves loopholes that can be taken advantage of by criminals for fraudulent activities. This not only incurs heavy financial damages to property owners but also threaten the safety of everyone who lives and works at the community.  

Rental Fraud

According to a report by Forrester, 97% of property management companies have experienced rental fraud. In most cases, the fraud begins with fake IDs. Oftentimes, the process of committing rental fraud is as follows:

  • A fraudulent individual purchase an identity through a CPN ad on Craigslist. This identity involves an extensive set of information such as social security number, name, age, date of birth, credit history, etc. These identities are either stolen identities or synthetic identities.
  • In simple terms, purchasing a CPN allows criminals to cover up historical records that would disqualify them from housing. These records can include crime, felony, bad credits, fraud history, etc.
  • The individual then obtains a forged ID, such as a drivers license. The ID would contain the individual’s photo along with personal information from the identity he/she purchased.  
  • The forged ID is used to tour a community & apply for an apartment.
  • The individual is approved for housing because the purchased identity has clean records and easily passed the background check.
  • As a result, fraudulent applicants can get approved for housing and begin carrying out plans that subject management companies to losses due to unpaid rent and eviction.

There are multiple ways rental fraud can be committed. Be on the lookout for our next blog post to learn more about the different ways a person can commit rental fraud.”

The Cost of Rental Fraud

When a fraud case is realized, it is often costly to evict the fraudulent individual from the community. The financial damage averages at $7,500 per case of fraud. This includes the cost of lost rent and the legal fees involved in evicting an individual. Depending on the state where your property is at, the number could be significantly higher due to higher cost of rent and eviction regulations.

Resident and Staff Safety

On top of the heavy financial damages, housing a fraudulent individual can also put your staff and residents’ safety at risk. Not only are you housing someone who is causing financial losses to your company, you are also housing someone who possibly has a history of committing criminal activities. This can threaten everyone who works and lives at the community.

Conclusion

Verifying prospects’ IDs before touring, therefore, is crucial in helping companies protect their investments, staff, and residents. When a forged ID fails to verify, the prospect is not allowed to tour the community; and the leasing process stops. No background check is performed. No credit check is required. No application is processed. Preventing rental fraud at the early stages – before a tour even begins – not only saves you money but also saves your employees time to help other prospects who can provide valid credentials.