The Rise of Rental Application Fraud in 2024

Rental application fraud is a growing concern in the property management industry. As of 2024, data shows that fraudulent applications are on the rise, with applicants often providing false information to secure rental properties, which include falsified employment details, fake references, and altered credit reports.  The National Multifamily Housing Council reports that 93.3% of property managers surveyed from November 2023 to January 2024 experienced fraud. As a property owner / investor, this can cost you a ton of time and money in evictions, repairs, property vacancies, and finding new tenants.

Current Trends in Rental Application Fraud

1. Synthetic Identity Fraud

Synthetic identity fraud involves creating a new identity by combining real and fake information. Fraudsters often use a mix of valid Social Security numbers, usually those of minors or deceased individuals, with fictitious names and addresses. This type of fraud is particularly challenging to detect because the identity is partially valid and can pass many standard background checks.

Prevention Tip: Use comprehensive identity verification services that can cross-check multiple data points and detect inconsistencies in the applicant’s information.

2. Falsified Income and Employment Documents

Applicants are increasingly turning to fake pay stubs, employment letters, and even entire websites dedicated to generating realistic-looking financial documents. This trend is driven by the need to meet income requirements that they wouldn’t otherwise qualify for.

Prevention Tip: Contact employers directly using publicly available phone numbers rather than those provided by the applicant. Consider using third-party verification services that specialize in employment and income verification.

3. Manipulated Credit Reports

Some fraudsters are submitting doctored credit reports or using services that temporarily inflate their credit scores. These manipulated reports can make a poor credit history appear stellar, thereby increasing the chances of approval.

Prevention Tip: Always obtain credit reports directly from the major credit bureaus (Experian, TransUnion, and Equifax) rather than accepting reports provided by the applicant.

4. Fake References

Applicants may list friends or family members as landlords or employers to provide glowing references. These fake references can easily skew the perception of an applicant’s rental and employment history.

Prevention Tip: Cross-verify landlord references by looking up property records and confirming ownership. For employment, use LinkedIn or other professional networks to verify the reference’s legitimacy.

5. Identity Theft

Identity theft involves using another person’s identity to apply for rental properties. This can lead to significant financial and legal issues for the actual person whose identity was stolen.

Prevention Tip: Conduct thorough identity checks and require multiple forms of ID. Be vigilant for discrepancies in the information provided and consider using identity theft detection services.

6. Altered Rental Histories

Some applicants provide falsified rental histories to hide past evictions, late payments, or conflicts with previous landlords. They might use fake landlord letters or altered rental agreements to create a favorable rental history.

Prevention Tip: Use landlord reference checks and rental history verification services to confirm the accuracy of the information provided by the applicant.

7. Digital Signature Manipulation

With the rise of online applications and digital lease agreements, fraudsters have found ways to manipulate digital signatures and documents. This can include using stolen digital signatures or altering documents after they’ve been signed.

Prevention Tip: Implement secure digital signing platforms that offer audit trails and verify the authenticity of signatures. Consider using multi-factor authentication for added security.

Let Keyrenter Gilbert Help

Tenant screening alone can take up a ton of time and effort to ensure you get the right tenant.  If this is becoming a problem for you contact Keyrenter Gilbert Property Management.  We have an extensive 21-step screening process and an industry leading 0.03% eviction rate.  In other words, we rarely need to evict one of our tenants. In fact, we are so confident in what we do, if there is ever a need to evict your tenant, we will cover the cost of it through our EvictionGuard Guarantee.  We offer full-service property management, as well, as lease-only services.

Conclusion

Rental application fraud is an ever-evolving challenge for property managers and landlords. By staying informed about the latest trends and implementing robust verification processes, you can significantly reduce the risk of falling victim to these schemes. Remember, investing in thorough screening processes not only protects your properties but also ensures a safe and trustworthy environment for all your tenants. 

Contact us today at [email protected] or call 480.485.3300, so we can bare this burden for you and protect your time, money, and investments!