Landlords Can Use Background Checks To Reduce The Risk Of Identity Theft

The latest Identity Fraud Report by Javelin Strategy and Research showed that in 2012 there were 12.6 million victims of identity fraud in the United States, which had increased by one million on the previous year. While online fraud is a significant contributor, the survey also showed that 1.5 million of the victims knew those who had committed the fraud. Landlords appear particularly vulnerable to this, with a UK study originally conducted by credit expert who provide credit reports and security against identity theft, showing that nearly half of those who knew the fraudsters were landlords.

Landlords at risk

It is particularly easy for tenants to use their landlord’s identity if they previously lived there themselves and the landlords still have post delivered to that address; even junk mail can provide extra information to dishonest tenants. Last year there was the case of an IRS employee who used her landlord’s details, amongst others, to take out credit cards in their name; her scheme was uncovered and she currently faces a long prison sentence and fine of $1.25 million. While it is most usual for tenants to use the identity theft to obtain credit cards or a personal loan, in very rare instances tenants have been known to sell the property that they are renting or take out a mortgage on it.

Background checks on tenants

When operating as a landlord it certainly pays to have a background check conducted on any potential tenants; the small price you pay will be well worth it if it identifies a fraudulent past and saves you falling victim to them. A reference from their current or previous landlord just isn’t enough security; you need to be sure they are who they say they are and haven’t a chequered past. At its basic level, proof of identity, address and employment are all important, as is searching for any information that may hint at any previous wrong doing. While you could potentially conduct this background surveillance yourself, if you have a daytime job as well as a portfolio of properties, the time and effort that this would require makes it preferable to hand the job over to experts in the field.

Additional steps for landlords to takes

Besides requesting a thorough background check, landlords can protect themselves against identity theft in a number of ways:

  • Always let anyone you do business with know your new address; it is too risky to continue to have mail sent to a property where you have tenants living. Additionally, the United States Postal Service offers redirection of your post for when you no longer live at a property.
  • If you believe you should have received mail, but have noticed that a number of items have not arrived for you, again contact the United States Postal Service, as someone may have set up a redirection to obtain your details.
  • Request your name be removed from mailing lists by completing an online registration with the Mailing Preference Service; this will eliminate junk mail being sent to your properties.
  • Check your credit rating periodically, as this is the easiest way to determine whether someone is using your name to obtain credit. Not all US citizens are aware, but they are entitled to obtain one free credit report each year from the three leading credit bureaus; simply visit the Annual Credit Report website to obtain yours. However, anyone living in Colorado, Georgia, Maine, Maryland, Massachusetts, New Jersey or Vermont, is able to receive a second annual credit check free of charge; for these you need to contact Equifax, Experian and TransUnion separately. If you believe you are at high risk of identity theft or have previously fallen victim to it, you may wish to pay for additional credit checks on a quarterly basis.
  • Consider having restrictions placed on your rental properties to prevent them being sold without your knowledge; a sale can only go ahead once proof of ownership has been provided.

If you are a landlord, ensuring that you always obtain a background search on those staying in your property and taking the extra precautions discussed above can significantly reduce the risk of you becoming a victim of fraud by your tenants.

Ruth helps people keep safe online through encrypting their files and through understanding the risks of identity theft.

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