The apartment industry understands it has an identity theft problem. It’s simple; more online applications have led to more rental identity theft. Property managers know this. A 2018 survey commissioned by credit reporting agency Trans Union found that 97% of property managers had experienced identity theft problems within the past two years.
Most rental identity fraud is discovered after the fraudulent tenant moves in. One manager in the survey explained, “We’re encouraging everyone to lease an apartment online, get their credit checks online, sign the lease online. We love being off-paper, but sometimes we don’t meet applicants until they move in, so this increases the risk for fraud.” In other words, applications have moved online, but fraud prevention techniques have not evolved with this change.
Rental Application Identity Theft – Non-existent Barriers of Protection
Traditional barriers to fraud have been dropped: managers no longer speak to applicants or compare a driver’s license to a tenant’s face in person to check that the tenant is who they say. The shift to automated online applications has encouraged laxity in reviewing identity documents. As the Trans Union study puts it, “Driver’s license checks and scans do not equate to fraud prevention, and, in many cases, on-site teams are not even seeing this in an online application.” The data might be collected, but that doesn’t mean anyone checks it.
Some companies (including Trans Union) offer “solutions” to property managers to detect application fraud. Back in 2020, Trans Union’s ResidentID program “failed to authenticate” nearly a quarter of applicants, which suggests either an incredibly high rate of fraudulent applications or that Trans Union’s product just wasn’t very good at confirming the identities of applicants. While Trans Union claimed that its product reduced fraud, a quarter of ResidentID customers still had problems with ID theft in applications. Reliance on automated identity checks is, therefore, also likely to be flawed.
What Does it Mean to Consumers?
Why does all this matter to consumers? Because undetected identity theft will become ‘the problem’ of the consumer whose identity is stolen. You might not know you’re a victim of identity theft until you suddenly can’t get an apartment, mortgage, credit card, or even a job, because the identity theft has left a black mark in your rental or credit history. By this time, the property manager’s incentive to detect the identity theft has largely disappeared: the fraudulent tenant has already failed to pay rent and been evicted or disappeared. There’s only one person left who might pay the fraudulent tenant’s bill: the victim.
The good news is that if you’re a victim of identity theft, the law is generally on your side. You aren’t liable for a lease you never signed or authorized. You can dispute items in your rental and credit history, and your disputes must, by law, be investigated. You can even sue if your disputes are ignored or mishandled. Rental application identity theft is not something you just have to live with.
As trusted and experienced Identity theft lawyers, the team and the Holland Law Firm can help you sort out the mess that identity theft leaves behind and seek damages from those responsible.