What is Identity Proofing?

“Can you pay your rent?” Of course you want to confirm that a future resident has the means to pay rent every month. But the question you should be asking first is, “Are you who you say you are?” 

Answering this question—identity proofing—is the most important step in tenant screening. If a prospective tenant lies about who they are, the rest of their application is moot.

Identity proofing helps landlords avoid renting to bad tenants and the associated risks to the property and existing residents. It’s crucial you do thorough identity proofing—we’re breaking it down, including what it is, how to roll it out in your tenant screening process, the benefits, and more. 

What is Identity Proofing?

Also known as identity verification, identity proofing confirms that an applicant is who they claim to be. It is a core component of a multi-layer fraud detection strategy that protects against scams. 

Key Elements Involved in Identity Proofing

Identity proofing isn’t as complicated as it sounds, but it’s critical for getting the right tenants in the door. It involves three steps:

Collecting identity documents. Ask the applicant for documents, like a driver’s license or passport. These documents should include a photograph, name, date of birth, expiration date, and address.

Validating document authenticity. The ID in your hand could have been created fraudulently, and, no, it’s not as easy to spot fakes as you think. Do a visual inspection for obvious signs of tampering, like missing watermarks and blurry images. But don’t trust your eyes alone—double-check with a digital fraud detection tool that can quickly and accurately verify a document’s the real deal.

Matching the individual to their documents. Check that the data on the ID lines up with other information. Do the height, eye color, and age on the ID match the person sitting in front of you? Is the address on the ID the same as those on their utility bills and in public records databases?

Identity Proofing Common Use Cases

Identity proofing is fundamental to organizations that need to undoubtedly verify that the person in front of them is really who they allege to be. Multiple industries rely on identity proofing to decrease risk and protect themselves, like: 

Financial services. Before issuing a loan or credit card to an applicant, banks must complete identity proofing.

Government processes. Government agencies must verify your identity to apply for a state-issued ID or state-funded services.

Tenant screening. Property managers want to be sure the tenant signing the lease agreement has proven their identity.

How Identity Proofing Works

Identity proofing is a multi-phase process. But if you follow these simple steps, you can protect yourself—and your property—from the fallout of high-risk tenants.

To ensure compliance with fair housing laws, always ask for the same documents from each applicant. And, to avoid a discrimination lawsuit, use the same objective identity proofing criteria for each renter.

Doing extra identity proofing on one applicant but not another is a surefire way to get in legal hot water.

Step 1: Document Collection

Complete identity proofing starts with collecting documents. Ask for more than one—you’ll want to cross-reference them against each other to check for ID fraud.

While most landlords use the same documents for verification, you might want to create a standardized list of documents you accept, like:

• State-issued IDs, like driver’s licenses and passports
• Utility bills
• Pay stubs
• Bank statements

It’s harder to see signs of forgery or fraud on document copies, so make sure you ask the applicant for the original documents. 

And if you plan to use these documents for credit or background checks, get written permission first. Conducting these checks without consent violates consumer protection laws. You’ll also need to securely store all sensitive data and have reliable ways of destroying it. 

Pro tip: Use a property technology tool with robust information security policies to make safe data storage and deletion easier.  

Step 2: Document Verification

When doing identity proofing, verify both manually and with automated checks. Manual checks are more prone to human error, so the best way to combat potential fraud is with a combined approach. 

When manually inspecting an applicant’s document, look for red flags, like: 

• Typos or misspellings
• Inconsistent fonts or spacing
• Blurry images or text
• Old or out-of-date company logos
• Signatures that don’t match
• Past expiration dates
• Low-quality printing or paper
• Missing or incorrect holograms and watermarks

As document fraud becomes more sophisticated, it’s harder than ever to catch fakes with just a physical inspection. AI models can create a convincing fake in mere minutes, for as little as $15. 

Using a powerful ID verification tool for identity proofing can help you quickly, securely, and accurately check an ID by running detection algorithms to catch signs of tampering. 

Step 3: Identity Matching

Once you’ve confirmed submitted documents are genuine, make sure the identity actually matches the applicant. Remember to combine manual and digital processes for thorough identity proofing. 

Start with a quick check to catch any glaring issues, like: 

• Major differences between the ID’s photograph and the applicant’s physical appearance
• Mismatched addresses, names, or dates of birth across documents
• Different eye color, height, or hair color between the ID and the prospective renter

Double (or even triple) check with a robust ID verification solution that uses biometric tools, like liveness checks and selfie ID, for improved accuracy. 

Step 4: Data Validation

You’re almost certain that an applicant’s submitted documents are genuine and match the potential renter, but you’re not done ruling out identity fraud. 

Maybe the applicant has combined multiple genuine identities to create a convincing synthetic one. Or they’ve invented a seemingly real (but nonexistent) person with AI. 

Either way, validate the data by cross-referencing against trusted databases, like credit bureaus and government records. And save time with a third-party ID verification tool like Snappt that can automatically check multiple data sources for you. 

Benefits of Identity Proofing for Property Managers

Identity proofing isn’t always easy, and even with great tools, it can be time-consuming. But the risks are simply too great to skip it. A repeatable identity-proofing process minimizes risk and offers quite a few benefits.

Fraud Prevention

Identity fraud continues to rise across all sectors—cases have increased by about 12% every year since 2020—with no signs of slowing down. Identity proofing can catch rental fraud during the application process, preventing you from falling prey to tenant scams.

Streamlined Tenant Screening

Tenant screening helps you find great tenants, but it can be time-consuming. Identity proofing first can save you the hassle of going through all screening steps only to discover fraud at the end. 

If you discover someone trying to commit fraud, you can reject them upfront before going through the whole screening process.

Improved Security

A fraudulent tenant in your community can hurt your property, business, and other residents. Identity proofing helps you avoid the havoc a fraudster can create, like bad debt and costly evictions. 

Legal Compliance

An identity proofing process doesn’t just save time and increase security—it helps you follow the law. Putting extra ID scrutiny on some applicants but not others can break fair housing laws. 

Ask for the same documents and apply the same standards to every application. When you follow and document your process consistently, you decrease your legal risk.

Implementing Identity Proofing in Tenant Screening

You know that identity proofing can reduce risk, get good tenants in the door, and create a better tenant screening process. But how do you incorporate identity proofing into your tenant screening process? 

Choose the Right Tools

While manual verification can work on its own, combining manual and automated verification is your best bet for catching a fraudulent tenant. Many tenant screening services offer identity proofing and fraud detection, but you’ll want a tool that offers these key features: 

• Document verification to confirm authenticity and detect forgeries
• Biometric matching for enhanced identity checks
• Database integrations for quick and accurate data validation

Set Clear Guidelines

Discrimination accusations pose a serious risk to property managers. To avoid any claims of unfairness, establish consistent and straightforward rules for: 

• Which kinds of documents you require with accepted alternatives
• Approved tools for identity proofing and document verification
• Obtaining written permission to run checks
• Procedures for safely storing and deleting data

Write these guidelines as a policy to share with all applicants, and communicate the process clearly before prospective tenants start an application.

As you process the application, document every step along the way. You may need these notes later if an applicant claims you rejected them out of bias.  

Train Your Team

Make sure all property managers, leasing agents, and other staff follow established guidelines, and, as new employees join, train them on compliant tenant screening and identity proofing.

Don’t stop with onboarding—provide ongoing education to all employees so they know how to use identity proofing appropriately. 

You’ll also want to train your team on policies for responding to and reporting identity fraud. If you or a team member suspects fraud, ask about the inconsistencies first and request additional documents.

Avoid accusing anyone until you have solid evidence of fraud. If you do reject someone’s application, adhere to all federal, state, and local laws.   

Combine with Other Screening Steps

Add identity proofing to the top of your tenant screening checklist, and follow with background and credit checks. Don’t forget other steps like obtaining proof of income and rental verification to get a complete picture. 

Identity Proofing Challenges and Best Practices

Identity proofing is a must-have, but using it effectively can require extra effort. These tips and tricks will help you maximize identity proofing and detect fraud in rental applications.

Challenges

Identity proofing touches on two tricky topics: data privacy and consumer protection. Because regulations affect how and when to use identity proofing, it can create some challenges. 

Any time you collect or store sensitive information, think about data privacy. Only collect documents when necessary, and use them within the boundaries of laws like the Fair Credit Reporting Act. 

Only use tools with a strong track record of complying with consumer protection laws.  

Another consideration is how you’ll handle applicants who may not have passports or driver’s licenses. If you come across these applicants, ask for corroborating documents, like utility bills, pay stubs, and bank statements. 

Best Practices

To address data privacy concerns, use encrypted and secure platforms to handle documents. And make sure whatever platform you use has rigorous information security policies. 

For applicants without photo IDs, provide alternative verification options. Consider accepting documents, like: 

• Birth and marriage certificates
• Blank checks from an accredited bank
• Student ID
• Diploma
• Employee ID
• Cards with photographs—gym, credit, or library cards

Staying ahead of fraudsters is tough in a tech-enabled landscape. Bad actors constantly update their tactics to bypass identity proofing software. 

But you can overcome this by staying up-to-date on the newest fraud techniques. Look for identity proofing solutions with a dedicated fraud forensics team who keep an eye out for new fraud methods and update their software to combat them. 

Protect Yourself and Your Property with Identity Proofing

If an applicant’s identity is fake, glowing references and a stellar credit score don’t mean much. That’s why identity proofing is foundational to effective tenant screening. Without it, you can’t know for sure if any other checks reflect the person applying. 

Adopting identity proofing in your tenant screening process increases approval accuracy and security while reducing risk. And performing the same identity proofing process on every application creates trust both with prospective tenants and regulatory agencies—and enhances fraud detection.

Learn how you can use fraud detection tools to create a multi-layered fraud prevention strategy with our downloadable guide.