Recently Fannie Mae released a security alert regarding appraiser identity theft.. With a quick search, it doesn’t take long to find other appraiser fraud alerts from HUD and other agencies going back years. It’s a concerning trend.
It’s easy to look to lenders, Appraisal Management Companies (AMCs) or appraisal firms for lacking oversight, but the core of the problem is, this issue will perpetuate until vendor management policies hold knowing their vendor and contractor to the same standards as knowing their customer. Identity theft problems are not unique to the appraisal and inspection industries. Independent contractors like appraisers and inspectors are targeted for fraud the same way consumers are.
It’s essential that vendor managers incorporate identity validation as part of the vendor onboarding process. For most vendor managers, this starts from gathering evidence from the appraiser or inspector directly. This self-reported data continues through vendor due diligence processes that include utilizing public records and licensing agencies, however even with established policies and procedures for verification, identity theft remains a risk.
Solutions such as tax ID verification through vendor self-reported documentation still falls short on identify validation, because this process lacks an actual visual review of the vendors government issued ID against any photos.
New AI-driven Digital Identity Verification Solutions to validate the user’s government issued credentials are an emerging option to help combat identify theft. These are becoming increasingly reliable and are now accepted by the U.S. government for Americans accessing services. Digital ID systems have become so sophisticated they can work from nearly every government issued ID including state issued driver’s licenses, military ID, or passports. Digital ID systems use a real-time taken selfie image with liveness detection to confirm the user against their ID and can defeat the most common types of identity fraud.
At ShieldHub, we take the approach that background checks available through our partner Consumer Reporting Agencies (CRAs) must include Digital ID Verification. This ensures that when you receive a ShieldID, it references a background check that you can trust has been verified against their government issued ID. By adding this process part of the screening and onboarding, lenders, AMCs, and appraisal firms can ensure that they know their appraisers and inspectors are who they claim to be.
