How Car Rental & Carsharing Companies Prevent Fraud with ID Verification and Criminal Background Data

Identity fraud is rocking the car rental and carsharing industry

Car rental identity fraud and vehicle damage are rising nationwide concerns for the vehicle rental market. The cost of stolen rental vehicles due to fraud is conservatively estimated at around $152 million per year. 

Car rental and peer-to-peer carsharing fraud starts with criminals stealing identities to rent or share a car and then never returning the vehicle. Often these stolen vehicles are used to carry out more egregious crimes such as arson, drug trafficking, controlled substance violations, kidnapping, burglary, robbery, and/or weapons violations. It’s imperative for car rental and sharing companies to take proactive steps to create a safer and more trusted community experience and protect their bottom line.

Three effective methods of reducing vehicle fraud and damage are by up-leveling your trust and safety efforts and reducing vehicle fraud and damages by 1) performing strong  ID verification, 2) performing a nationwide criminal database search, and 3) looking up driver history records. 

Why invest in a modern trust & safety solution for your car rental or carsharing company 

Let’s explore how these three methods create value:

• Using ID verification, you can feel confident that the person using the vehicle is who they say they are.  Since the first step to most fraud attacks is creating a fake account, using reliable ID verification will prevent that first step from ever happening.
• With nationwide Criminal Database searches, you can get a clear view into past criminal behaviors in order to make informed decisions about your potential clients and the risk they represent.
• Using Driver History data via access to Motor Vehicle Records (MVRs), is an indispensable tool for vehicle rental or sharing companies who want to establish a driver’s level of risk. Car rental and carsharing companies can integrate MVR data in their rental onboarding processes to gain a better understanding of a renter’s likelihood of damaging a rented vehicle as a result of poor driving behaviors or past tickets, records or convictions (i.e., if they’ve received a DUI).

When evaluating a potential client’s MVR, it’s essential to look for red flags such as license suspensions, multiple traffic infractions, or a history of accidents. Renters with poor driving records are more likely to be involved in incidents that could result in damage to your vehicles. By screening prospective renters when they onboard you will prevent unnecessary claims and costs related to insurance and damage payouts.

The Tessera Safety Trifecta = ID Verification + Criminal Database + Driver History

Leveraging our ID Verification, Criminal Database, and Driver History products in your rental or carsharing workflows offers powerful tools for renter risk assessment.

How does Tessera’s ID Verification solution work?

An ID verification typically ends at biometrics matching (like an uploaded picture ID or selfie). Our comprehensive ID verification solution goes further to complete the ID verification chain; in addition to biometrics matching and confirmation that the license is authentic, we additionally check to ensure the license was legally registered through a trusted source (further confirming its legitimacy). 

We do this through our partnership with the American Association of Vehicle Administrators (AAMVA.org) which empowers our offering to deliver near-instant turnaround times (TAT) against trusted and authoritative data sources (like the DMV).

Next, layer in Tessera’s national criminal database

Once you know your potential renter is who they say they are, take another protective step by doing an instant search of our national criminal database. This search allows you to identify renters with a history of fraud, theft, and other egregious criminal activities before they rent their first car.

You can easily integrate our data feed into your new user onboarding flow. Using limited PII (i.e. their name and date of birth), in seconds you can retrieve a simple “safety screening” confirmation of existing records and pause their onboarding process for further investigation. For the users without records or flags, they will continue sailing through your process without friction and will be on their way to booking their first rental.

Last step! Integrating Driver History intelligence

Finally, our driver history product helps you evaluate driver risk and determine the likelihood of damage to your vehicles as a result of poor driving habits or past convictions. You can similarly integrate our database feed via API into your onboarding flow to scan for suspended licenses or other activities. Our Driver History product does the hard work of standardizing the output for all 51 jurisdictions allowing customers to easily make decisions regarding risk and privilege to drive?  This standardization allows you to apply rules to the data based on what is important to you.

Incorporating this trifecta of data into your rental process can be very quick, efficient, and cost effective. Imagine paying cents per user compared to thousands of dollars in damaged, stolen or other insurance claims and payouts. Establishing a more secure process for renting/sharing vehicles can also deter bad actors looking for an easy target.

Tangible benefits of Tessera IDV, Criminal Data, and Driver History integration

In closing, modernizing your trust and safety processes via our Safety Trifecta–IDV, Criminal Database, and Driver History integrations–offers a comprehensive and trusted solution that will result in serious cost savings for your car rental or carsharing business. 

• We empower you to prevent fraud and risk to minimize the staggering cost of damages to vehicles and inventory loss due to fraud. 
• By establishing a more robust process and checking against authoritative data sources, you can trust the accuracy of the information you learn about your prospective renters. 
• By owning more responsibility to screen prospective renters before they book their first rental, especially in the case of peer-to-peer carsharing, you’ll bolster trust with your renter community encouraging more owners to sign up for your platform, increasing your inventory supply.  

See Tessera’s comprehensive data solution in action

We’re committed to the success of your car rental or carsharing business, and are excited to hear more about your business goals and challenges. 

Learn more about our Criminal Database, Driver History and ID Verification solutions for businesses like yours by booking time with our amazing Sales team: