Disclaimer: This article is not legal advice. Legal information is not the same as legal advice, where an attorney applies the law to your specific circ*mstances. Consult an attorney for advice on your interpretation of this information or its accuracy. You may not rely on this article as legal advice, nor as an endorsem*nt of any particular legal understanding.
If you want to ensure a smooth leasing process and a positive rental experience, it pays to be skilled at spotting red flags on applications — especially since rental application fraud is on the rise and is expected to peak in 2024.
Fake rental applications are more common than you might realize and can have disastrous consequences. In fact, over the past year 93.3% of property owners and managers said they have experienced fraud. By familiarizing yourself with the warning signs, you’ll be able to spot and avoid a fake rental application before it can come back to haunt you.
What is a rental application scam?
Simply put, a rental application scam is when a prospective renter poses as a legitimate applicant by deceiving a landlord or property manager with false information. Scammers often fabricate personal and financial details, such as income, employment history, and rental references, with some even going as far as identity theft. Their goal is to appear as qualified and trustworthy tenants. And unfortunately, many unsuspecting landlords and property managers can easily fall into their trap.
Why you should care about preventing fraud
Fraudulent applications can cascade into a myriad of issues including financial losses, property damage, costly evictions, and legal complications. A recent survey conducted by the National Multifamily Housing Council revealed that it costs landlords millions. However, by proactively taking steps to prevent fraud, you can ensure you’re renting to a reliable tenant and reduce the risk of unpaid rent or other complications.
How to spot a fake rental application
Rental applications can be easily forged or modified. Here are some dead giveaways that a rental application is fake:
Unverifiable income
It’s not uncommon for fraudulent applicants to exaggerate their income or provide false documentation. With numerous online tools available, scammers can generate pay stubs and other financial documents like tax returns to make them appear legitimate at first glance. If you’re suspicious, always verify their income, W-2s, bank statements, and confirm additional details with their employer.
No contact info for current or previous landlords
Did the applicant “accidentally” forget to include contact information for their current or previous landlords? Or did you try and call their references only to discover they didn’t provide a real phone number? Applicants who had issues with their previous landlord or aren't serious prospects are more likely to falsify this information to prevent you from discovering the truth. They may be intentionally trying to hide something which is a signal to proceed with caution or disqualify them.
Multiple residences over a short time period
Some applicants have legitimate reasons for why they’ve moved so many times; for example, someone might relocate because of a job offer or to care for a family member. Bad actors, on the other hand, might frequently relocate because of tenancy issues. If an applicant has more than two addresses listed in the past 12 months, it’s worth further investigating to make sure it’s not because of a more serious issue.
Incomplete application
If you notice that an applicant hasn’t fully completed the application, it may be a deliberate attempt to conceal information or suggests they aren’t a serious candidate. Fraudulent applicants may leave sections of the application blank or provide vague information to avoid scrutiny and prevent you from discovering inconsistencies in their story. Before you jump to conclusions, you can circle back with the applicant to ask them to provide the missing information. If they refuse to give it to you, you should be extra cautious about how you proceed.
Information does not match with screening reports
Are there discrepancies between the information provided in the application and the screening reports? If so, it should raise concerns about the applicant's honesty and transparency. Inconsistent information is a tactic scammers may use to manipulate the application to put themselves in the best light possible. Either way, if differences are spotted between the application and screening report, it merits further investigation.
Missing or cut-off pages in credit reports
If pages are missing or cut off from an applicant’s credit reports, there’s a chance it’s been tampered with. Maybe the applicant is trying to hide something or maybe they are covering up outstanding debts that they don’t want you to know about. Either way, if information is missing it’s a red flag that’s worth paying attention to.
Applicants are in a rush or ask to move in right away
It can be tempting to accept a tenant who is eager to move in quickly so you can fill a vacancy. However, unlike renters who have legitimate reasons to move things along (such as a job relocation, family emergency, or a sudden change in living circ*mstances), scammers may put pressure on you to speed things up so you don’t have time to scrutinize the details of their application.
How to prevent rental application fraud
Some fake rental applications may look legitimate and there’s always a risk one can slip through the cracks. But by taking proactive measures like those below, you can better protect yourself against rental application fraud.
Use an online rental application service
Online rental application services add an extra layer of security and efficiency to the screening process because they offer secure submission and storage of applicant information to reduce misplaced documents and tampering. These services also often integrate identity verification tools, making it easier to weed out scammers and harder for fraudulent applications to go undetected.
Establish strict screening criteria
When you use a thorough tenant screening method, you’ll be able to find high quality tenants and filter out the problematic ones. Start by conducting a background check and reviewing their rental history to gauge their financial responsibility. Contact the tenant’s previous and current landlords and employers to confirm their validity. In addition, consider meeting them in-person for an interview.
Hire a property management firm or agent
Property management companies or experienced agents often have industry knowledge, access to specialized tools, and a network of resources that can protect you against potential fraud or leasing complications. Property management firms also have verification procedures to strengthen the vetting process. And as experts in their field, they can guarantee compliance with legal requirements too.
Avoiding fraudulent rental applications
As a landlord or property manager, knowing how to review rental applications can help you secure ideal tenants, avoid scammers, and run a safe rental business. While rental scams and fraudulent applications can be a real nightmare, there’s ways you can avoid them—and RentSpree can help you.
RentSpree’s Rental Application not only helps you minimize application fraud but also gives you a complete picture of your applicants so you can choose the right tenants for your property. Curious to know more? Try RentSpree and learn how it can help you protect your rental investment today.
Continue to Chapter 4: 5 Common Problems with Lease Applications, or jump to a different article.
- Rental Application Process 101
- Reading Standard Rental Application Forms
- Identifying Tenant Red Flags on Rental Applications
- 5 Common Problems with Rental Application Requirements
- Free Rental Application Form
- Rental Application Denial Letter
- The Fair Housing Act
