The process of qualifying applicants for rental apartments has historically been accomplished by running a traditional background check involving database-driven searches of credit, eviction, and criminal information, along with manual verification of identity and income.  Because there is no universal database that exists to help automate the process, income and identity verifications have been more difficult to determine, and applicant fraud has increased exponentially due to easy-to-access tools that allow applicants to buy or edit fabricated documents. Fortunately, new services and technologies have evolved to solve these verification challenges.

Most management companies rely on manual reviews of paystubs, bank statements, and government-issued identification. This often results in manually calculating income, contacting employers, and conducting investigations in cases of suspected fraud. While the concept of income calculation is relatively straightforward, the many different paystub formats, pay frequencies, and compliance checks (such as making sure documents are current, consecutive, and cover the required lookback period) can make it difficult for even experienced staff to accurately assess and calculate income. In fact, studies have shown that over 35% of paystubs reviewed manually are calculated incorrectly.

Additionally, the national average for paystub, bank statement, and ID fraud is now around one out of every 10 applicants. The reason fraud is becoming more prevalent is because technology has made it both easy to do and difficult to spot. Two popular approaches fraudsters use are PDF editing and purchasing a mimic document.  For example, websites like PDFFiller.com provides a low-cost way to edit PDFs that would be invisible to the human eye. Applicants can also purchase mimic documents that are designed to look exactly like real paystubs or bank statements, and they cost as little as eight dollars.

Fair Housing is another challenge with manual verifications. While some property management staff realize that fraud exists, they do not have a standardized solution for assessing all applicants equally.  In some cases, this will result in decisions based on an unprovable hunch, which leaves companies vulnerable to Fair Housing violation claims.

Fortunately, new solutions are available to help with income verification and fraud detection for IDs, bank statements, and paystubs. Some companies offer to verify income through a limited database of employers.  Other companies connect directly to the applicant's online bank and payroll accounts. There are even stand-alone services for companies just looking for ID verification or for detecting paystub and bank statement fraud.

At Docuverus, we offer a comprehensive service that combines the best fraud detection available with income verification all in one place, and we do it without the need for databases or requiring applicants to divulge their sensitive bank or payroll login information. 

If your leasing and management teams are qualifying applicants for rental units, be sure to consult a professional who can ensure all your bases are covered. Identity checks, income verification and fraud detection can be done easily and all in one place- of you have the right technology.