Are questionable applications showing up as you screen tenants for your rental property?
Fraud and scams are more prevalent than ever, and it’s important to be vigilant in how you’re screening and evaluating potential tenants.
We’re operating in an increasingly digital world, and protecting your investment from fraud is more challenging than ever. From fake application forms to identity theft and phishing scams, fraudulent activity is a growing threat that can cause serious financial and legal headaches for landlords.
That’s why you need us: your Real Estate Gladiators. There are effective steps you can take to safeguard your rental properties from these risks. Today, we’re exploring common scams that target landlords like you and sharing practical tips on how to verify applications, spot red flags, and protect your investment. Whether you’re renting a single-family home or managing a multi-unit building, these strategies will help you create a secure leasing process and ensure you’re working with trustworthy tenants.
Remember: dishonest people see self-managed properties as opportunities. Work with a property management expert like us. We already have risk management built into our systems and processes.
Quick Summary:
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What Do Fraudulent Rental Applications Look Like?
Before we can deal with fraudulent rental applications, we need to know what they look like. What are the warning signs?
We’ve become pretty good at spotting the red flags. Here are the most common signs of fraudulent rental applications. We’re also sharing practical tips on how to catch dishonest information before it becomes a problem.
- Inconsistent or Vague Information
One of the first red flags to look for when reviewing a rental application is inconsistent or vague information. Fraudulent applicants may provide conflicting details that don’t match up across various parts of the application.
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What to Look For Inconsistent names. If the applicant lists different names in different sections of the application or provides multiple names without explanation, this could indicate they are trying to conceal their identity. Job history gaps. A dishonest applicant may list vague or unclear job titles, or may have unexplained gaps in employment. If an applicant’s job history seems unusually brief or inconsistent, it’s worth digging deeper. Address history discrepancies. Applicants who list previous addresses that don’t match up with records from credit or criminal background checks are a serious red flag. Be sure to verify all addresses provided. |
What to Do Ask follow-up questions. If there are inconsistencies, ask for clarification on employment dates or previous addresses. Cross-check information. Details provided on the application should match other records, such as credit reports, criminal background checks, and employment verification. Request detailed explanations. If there are any discrepancies, talk to the applicant about them, especially if the applicant has provided unusual or contradictory information. |
- Missing or Fake References
Tenant references are one of the best ways to verify an applicant’s reliability. Fraudulent applicants often provide fake or non-existent references to cover up their poor rental history or behavior.
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What to Look For Unverifiable references. If the contact information for the applicant’s references is missing, invalid, or leads to unresponsive individuals, it may be an indication that they’re not being honest. Too good to be true references. Applicants who provide references from friends, family, or people who sound overly enthusiastic and generic might be trying to create a fabricated image. No previous landlord contact information. A lack of a previous landlord reference can be suspicious, particularly if the applicant has a long rental history. It’s possible they’ve been evicted or had other problems that they don’t want you to find out about. |
What to Do Call references directly. This provides an opportunity to verify the information. Ask specific questions about the applicant’s rental behavior, such as whether they paid rent on time, caused damage to the property, or were respectful neighbors. Verify employment references. This will help you to confirm the applicant’s job status and income level. Look for patterns. If the applicant’s references are always from people with a similar name or if the references sound scripted, it may be worth asking more questions. |
- Exaggerated or Unverifiable Income
Many applicants may try to inflate their income to meet your rental criteria. While some exaggeration may be unintentional, fraudulent tenants may go as far as providing fake documents to mislead you into thinking they can afford the rent.
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What to Look For Unrealistic income claims. If an applicant claims an income level that seems too high relative to their job history or job title, it’s worth investigating. For instance, someone working as a barista at a coffee shop claiming a six-figure salary may be falsifying their financial information. Inconsistent financial documents. Fake pay stubs, bank statements, or tax returns are often used by dishonest applicants to inflate their income. Pay attention to details such as poor formatting or inconsistent fonts, errors or missing information, like missing employer names, incorrect dates, or absence of necessary tax information, and suspicious bank statements or pay stubs from banks or companies that can’t be verified. |
What to Do Request multiple documents. This will allow the tenant to prove income. Tenants can falsify pay stubs, so compare what they give you to tax forms and bank statements. You can also ask for contact details for the applicant’s employer or a copy of their employment contract. Verify financial documents. You may need permission from the applicant to access their employer or their bank. If they won’t allow it, you should wonder why. Use technology. Online tools like income verification services or background check companies that can automatically verify employment and income. |
- Unusual or Suspicious Background Checks
A criminal background check, credit report, and eviction history are standard parts of the tenant screening process. Fraudulent applicants may attempt to hide negative information or use tactics to manipulate these checks.
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What to Look For Unexplained gaps in criminal history. While some applicants may have minor infractions, a clean background check with no explanation may be suspicious if the applicant has a history of issues that should show up. Altered background information. Fraudulent applicants may try to cover up a criminal history or evictions by providing inaccurate or incomplete information. For example, they may omit past addresses where evictions occurred or misrepresent criminal convictions. Credit history manipulation. Some applicants may attempt to hide bad credit by submitting fake credit reports or by providing outdated or inaccurate credit information. |
What to Do Conduct thorough background checks. Work with a property manager or use a reputable screening service. Ensure that the background check includes criminal history, eviction records, and credit scores. Verify any red flags. When something shows up in the screening report, ask the applicant about that information directly and request documentation to support their explanation. Pay attention to patterns. There may be repeated evictions or bankruptcies that align with the applicant’s claimed employment or rental history. |
You may run into an applicant who seems just a bit too eager. Or, when confronted, just a bit too defensive. While enthusiasm can be a sign of a committed tenant, it can also be a tactic used by fraudulent applicants to distract you from key details.
Are Fraudsters Really This Smart? How Are They Doing It?
This is a crime of opportunity and mostly tech-driven.
Our data points to three specific ways that applicants are getting away with fraudulent applications and bypassing otherwise strict screening protocols that landlords and property managers have in place.
- Fake Documents.
Tenants are increasingly using advanced tools to forge documents that accompany their rental applications. While generative AI and digital editing software offer numerous benefits, they also present new challenges for landlords. With access to affordable tools, tenants can easily create fake pay stubs, bank statements, and employment verification letters that appear genuine. Even individuals with basic editing skills can produce convincing counterfeit documents in a matter of minutes, making it harder for property owners to spot fraudulent information.
- TikTok is Selling Information
Some tenants are turning to “renter packages” sold online, particularly through TikTok, to bypass traditional screening processes. These packages, often promoted by influencers with large followings, provide fake information such as Social Security numbers, Credit Profile Numbers (CPNs), and near-perfect credit scores. Recently, a TikTok influencer offered these packages for around a thousand dollars, designed to target people with past evictions or low credit scores, promising them quick approval for luxury apartments, sometimes in as little as two weeks. For tenants struggling with poor credit or rental history, these packages offer an easy way to present fabricated details that are more likely to get them past background checks, all by using contrived data bought from an influencer rather than their own legitimate information.
- Vacancy Hurts
Many landlords are being taken advantage of by tenants who exploit the urgency to fill vacancies quickly. Savvy applicants know that property managers and leasing agents are often focused on getting someone in place fast, sometimes overlooking potential red flags in the screening process. As a result, landlords might prioritize filling the unit over thoroughly reviewing the application or background check. If a tenant is eager to move in within just a few days, it’s important to scrutinize this urgency—it’s often a tactic used to rush the process and conceal fraudulent intentions. In many cases, that quick timeline could be a warning sign of fraud.
Technology makes it easy for people to commit fraud. We have to be vigilant about using technology (and our expertise and leadership in the rental market and property management industry) to fight against it.
Rental Scams and What They Look Like
From fake tenants to fraudulent payment schemes, we have also seen scams that can lead to lost rent, legal headaches, and even property damage. As a property owner, it’s essential to recognize the warning signs and take steps to protect yourself from falling victim to these common scams.
- The Fake Tenant Scam
One of the most common rental scams involves individuals who pose as tenants but have no intention of actually living in your property. Instead, they exploit the rental process to steal personal information or even commit other types of fraud. These scammers often present themselves as legitimate tenants but may try to trick you into signing a lease agreement without proper screening.
Scammers typically present a “perfect” tenant persona: they have great references, a stellar job, and even offer to pay several months’ rent upfront. After you’ve signed the lease and handed over the keys, they disappear, leaving you with an empty property, possibly with damage or unpaid rent.
Don’t rush the process. Make sure you’re consistent with your screening process, and meet the tenant in person.
- The Overpayment Scam
This one is pretty famous. In this scam, the would-be tenant may send you a check or money order for more than the rent amount, often with a follow-up message apologizing for the error. The scammer will then ask you to refund the difference. A few days later, the check bounces, and the tenant is long gone with the money you refunded.
Never agree to refund any money. In this situation, the scammer will send you a check or money order for more than the agreed-upon rental amount. For example, they might send a $5,000 check for a $3,000 rental and claim they made an error. After requesting a refund of the $2,000 “overpayment,” the scammer will ask for the money to be wired or sent via a non-reversible method. By the time the bank catches on and the check is flagged as fraudulent, the scammer has already vanished with your money.
Ask for certified funds in the exact amount that’s due. No exceptions.
- The Subletting Scam
This scam involves a person who rents your property with the intention of subletting it to someone else, often for a much higher price. The scammer might find tenants through online platforms, such as Craigslist, without your knowledge or consent, and collect the rent money directly from these subtenants.
Here’s how it works: a scammer rents your property, then proceeds to find someone else willing to pay more for the same space. The subtenant pays the scammer directly, who pockets the difference, leaving you with a rental unit that has tenants who aren’t officially on the lease. This scam is particularly dangerous because the original tenant often disappears without paying rent, and you’re left dealing with the unauthorized subtenants who may be damaging your property.
We have seen a variation on this scam, where a tenant uses someone else to rent the property because they know they have no chance of being approved.
- Screen tenants carefully to avoid this. Ensure that all prospective tenants are thoroughly vetted and aware that subletting is prohibited.
- Include a clear no-subletting clause. In your lease agreement, make it clear that subletting is not allowed without your prior written consent.
- Monitor the property from time to time. Perform regular inspections, especially after the first few months of a new lease. Be on the lookout for unfamiliar faces or signs that your tenant may be renting out rooms or areas of the property without permission.
- Encourage tenants to report subletting. Let your tenants know they can confidentially report suspicious activity or unauthorized renters on the property.
- Listing Theft Scams
This one affects tenants more than it does landlords, but if you’ve ever had your property involved in such a situation, you know how frustrating it can be to untangle everything. In this scenario, scammers will create fake rental listings online, often using stolen photos or exaggerated descriptions of the property, to attract potential tenants. These listings are typically offered at a much lower price than comparable properties in the area, enticing renters to jump on the deal.
The scammer will present a rental property that appears to be an incredible deal, often at a fraction of the market price. They will then ask for an application fee or security deposit upfront. Once they receive the money, the scammer will disappear, and the renter will either find that the property doesn’t exist or that it’s not available for rent.
We suggest that owners always list their properties with reputable property management companies like ours. Watermark all images. Insist on being contacted only through the property management company. Scams are less likely to occur when the scammer has to work against a property manager’s reputation and understanding of the process.
Application fraud and rental scams are a real threat to landlords and property owners, but by staying vigilant and taking proactive steps, you can minimize your risk and protect your investment. Always be cautious with who you rent to, verify information thoroughly, and ensure you’re using secure methods for payments and communication. A little extra caution now can save you significant headaches down the road.
We call ourselves Real Estate Gladiators for a reason. Standing between you and all potential threats to your property, you can trust us to keep you and your investment and your tenants safe.
Please contact us at Real Estate Gladiators. We serve Monroe, Issaquah, Bellevue, Everett, Lake Stevens, Kirkland, and other cities in and around King and Snohomish counties in Washington State.
