Apartment operators are constantly devising and revising ways to ensure the personal data of their residents is secure. But what about when the residents themselves commit fraud to live at your community?
A growing number of prospective renters are utilizing fake or stolen social security numbers and fake pay stubs to meet an apartment community’s qualifying standards. And if they’re able to succeed and become residents, predictable problems – and worse – can arise.
Delinquent payments become a regular occurrence, because these resident don’t actually earn the amount of money on those fake stubs. Worse yet, you don’t know the true identity of those residents who committed synthetic ID fraud, which could put your legitimate residents at risk. A panel of experts discussed possible ways to identify and combat these emerging types of fraud at the Summit.
“Synthetic ID is experiencing the biggest growth in the types of fraud we’re seeing today,” said Matt Ehrlich, Fraud & Identity Senior Director for Experian. “This occurs when a criminal combines real information and fake information to create a new identity. That identity is then used for a broad number of criminal purposes.”
Those purposes have spread to the multifamily industry. In 2010, the percentage of applicants who had obtained a new SSN within the past five years was less than three percent. From 2011-15, that number increased to nearly seven percent and is continuing to rise.
Community management teams should be well aware of the potential warning signs of screening an applicant. These include the inquired SSN belonging to a deceased person, a frequent amount of inquiries, the presence of a security statement on the SSN report and an issue date that cannot be verified.
“We’ve seen cases when applicants use their children’s SSN, particularly when the names are similar, such as Joe Smith and Joe Smith Jr.,” said Ginny Decker, Vice President of Business Operations for Monument Real Estate Services. “But it’s a red flag when someone in their mid-50s has a lack of credit history. A lot of times we were able to catch it based on information that the applicant provided on their on the application.”
New fraud tools such as Mobile Capture, Data Validation and User Authentication can help, as can training to help identify synthetic ID and fake pay stubs before it’s too late.