Stolen Identities in the Multifamily Leasing Process and How to Guard Against It

The scenario described below is based on actual experience at our properties.  

A prospective resident named John applies for an apartment.  During the application process, he provides a legitimate looking government ID, a month worth of pay stubs from a national employer, and a number to contact for a landlord reference.  He meets all the requirements and passes the criminal background check, credit check, and his reference, a small landlord, checks out.  He signs the lease, pays the 1st month prorate, and collects the keys.  Everything you would expect with a normal move in….  

But John never moves into the apartment and your office staff never sees him again.  Instead, someone else moves into the apartment.  The new person does not inform the office, and they never pay the rent.  Your property team assumes John has fallen behind and reaches out but can never contact him.  The person living in the apartment avoids the leasing office, and when questioned, says that they are a guest or relative.  John falls further behind and the property team starts the eviction process, but quickly receive a CDC declaration in the mail signed by John halting the process.  At this point, John owes the property a lot of money and he has done everything he can to make it as difficult as possible for your team to regain possession of the apartment.   

In the meantime, John has leased more apartments, at different communities, using the same ID and documents repeating the process described above.  He can do this because John is not actually John and he is using someone else’s ID and is moving quickly to lease as many apartments as possible before they start to show up on the credit record of the person whose ID he has stolen.  He has likely made some financial arrangement with the person(s) occupying the apartment(s) and is profiting from the scheme.  

Eventually you regain possession of the apartment and move on, sending John to collections, and writing off months of unpaid rent.  He will have seemed like any other resident evicted for nonpayment.  Unfortunately, the odds are that you and your property team will never know what really happened, and more importantly, that you could have taken steps to avoid it.  

Schemes like what we have described above are happening, and we know it because we have seen it firsthand at our properties.  One way to guard against it is by adding ID Verification to your screening process.  ID Verification tools flag suspicious applicants and ask them a series of questions to verify their identity.  Many background screening companies offer this solution at a reasonable cost.  It provides defense against what can be a very costly fraud.