What You Should Know About Rental Application Fraud

Conceptual triangular hazard road sign against a stormy sky saying fraud alert

Tenant application fraud has always been a problem in the rental housing industry, but it’s been on the rise since the start of the pandemic. One survey conducted in 2021 found that 55% of property managers experienced rental application fraud every few months, with 15% dealing with multiple fraudulent applications each month. To help you combat fraudulent applications, here are some tips on what to look for. Please note this is not intended as legal advice but for information only. Laws may vary depending on your location.

What is Rental Application Fraud?

Rental application fraud is essentially lying on the rental application. Mistakes or forgotten details are bound to happen occasionally, but rental application fraud refers to clear and purposeful misrepresentation of the facts. Although some of this fraud is committed by “professional tenants,” the availability of high-quality digital cameras, scanners, and photo editing software has made it possible for the average applicant to make themselves seem like a more appealing candidate.

There tend to be two types of rental application fraud:

  • The applicant provides fraudulent information to make it seem like they can pay rent
  • The applicant provides fraudulent information to hide the applicant’s mismanagement of finances

When an applicant is trying to make it seem like they can pay rent, they’ll generally submit falsified employment records, pay stubs, bank statements, or other documents that improve the perception of their monthly cash flow and assets. If they’re trying to hide evidence of financial mismanagement, they may resort to a form of identity fraud.

How to Protect Yourself from Rental Application Fraud

Here are some questions to ask yourself while looking for signs of fraud:

  1. Does the name on the document match the applicant’s government-issued ID?
  2. Does the income statement look accurate?
  3. Is the source of income a legal and legitimate business entity? For example, can you verify the person works there by calling or visiting the company?
  4. Do the documents appear to be real? Are there any incidences of mismatched font, letters swapped for numbers, or other inconsistencies on paystubs or other documents that a professional accountant wouldn’t make?
  5. Are the references provided legitimate? References can often be faked by friends and family. One way to check if they’re legitimate is to look up whether the name given on the application matches other information you find online.
  6. Is the applicant who they claim to be? Can they provide information that only they would know, such as the length of time they lived at their last address?
  7. Is your applicant a real person? If multiple things don’t add up, they may be using a false identity.

One of the best steps to take to protect yourself from rental application fraud is tenant screening. Get a background check, credit check, tenant verification, criminal check, and eviction history from Tenant Screening Center and cross-check this information with the rental application. This eliminates the possibility of the applicant digitally modifying documents in their favor.

Our comprehensive tenant screening and tenant verification reports are available to landlords and property managers throughout the U.S. They’re available online, 24/7, so you can order screenings at your convenience. In addition to traditional screenings, we also offer RentalConnect for landlords. With RentalConnect, there are no onsite visits, sign-ups, or membership fees, and the cost of the reports is deferred to the applicant. For more information, visit our services page or feel free to reach out to us with any questions you might have.

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