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Rental Application Fraud: How to Identify and Prevent Fraud

Rental application fraud is a silent menace that costs property owners an estimated $16.1 billion dollars annually, according to a recent Dwellsy survey.

As a leasing professional, you've likely encountered a few applicants who have submitted suspicious documents or provided inaccurate information.  While most of these instances are probably accidental, occasionally, these seemingly minor red flags can be part of a larger scheme to defraud you and your company.

Approving a renter based on a fraudulent application can have serious financial and legal implications and can result in property damage, business disruption, and, in extreme cases, can negatively impact the safety of your other renters.

With all this at stake, it’s important to understand the options at your disposal to help identify and prevent fraud! This article explores the concept of rental application fraud, common tactics fraudsters use, red flags to look for on rental applications, and best practices to prevent rental application fraud and protect your business.

What is Rental Application Fraud? 

Rental application fraud is the intentional misrepresentation of relevant personal information when applying to occupy a rental property. While some mistakes might be unintentional–like mistyping an address or social security number or submitting an expired ID–it is not uncommon for potential renters to misrepresent certain aspects of their personal information in order to qualify to live in a property for which they otherwise would not qualify.

Over half of surveyed property management professionals report receiving at least one fraudulent lease application attempt every few months. As a leasing agent, spotting and preventing rental application fraud keeps your company, reputation, rental facilities, and renters safe. 

Some agents still use a manual process to find and screen potential tenants. However, increasingly more are supplementing with online renter screening software to streamline their application screening process and ensure that no red flags slip through the cracks.  Regardless of your preferred rental application screening method, it’s important to understand the different mechanisms for rental application fraud and the signals you can look for to help identify it.


The Most Common Types of Rental Application Fraud and What to Do About Them

Rental application fraud is typically committed in several different ways. 

Doctoring of Documents

With the rise of easy-to-use design tools, creating false documents is easier than ever.  Would-be fraudsters can use these technologies to alter income, white out potential black marks on their records, and generally falsify any information that might make them a more attractive rental candidate.

Stolen Identity

This timeless method of fraud continues to plague the rental real estate industry as fraudsters become more and more sophisticated to circumvent more and more sophisticated identity verification methods.  The most common type of stolen identity rental application fraud is using a stolen driver’s license, social security card, or passport (commonly from a deceased relative) to falsify credit rating and income.


The lie of omission.  This type of fraud is exactly what it sounds like - non-disclosure of legal information that you, as the leasing party or representative, are legally entitled to.  It’s important to check your state regulations and to follow the non-discrimination principles laid out in the Federal Fair Housing Act, however as a general rule, you, as the leasing representative, are entitled to certain financial information about the rental applicant.  Some rental applicants may intentionally omit past financial events such as evictions and bankruptcies that you are legally entitled to be informed of.

Falsifying References

Another common type of fraud in the rental industry is the falsification of references.  Providing inaccurate information to a leasing representative regarding past property owners.  Fraudulent applicants will commonly provide contact information of friends or family members who will pose as former property owners and will misrepresent the applicant’s rental history.

Fraudulent Cosigners

In some cases, applicants looking to commit rental application fraud will use an unauthorized cosigner in an attempt to boost their credit or income level in order to qualify for a property that would otherwise be outside of their means.  This type of fraud can be especially damaging for renters and “cosigners” as it often results in extended litigation.

What Can You Do About Rental Application Fraud?

The best way to protect yourself from rental application fraud is to get in front of it.  If it goes undiscovered during the screening process, it is often extremely costly and difficult to sort out down the line.

There are a couple of easy steps you can take to help protect yourself from rental application fraud. 

First, the most important thing a leasing agent can do is be vigilant and use common sense.  Review all of the rental information closely and look for anything that doesn’t add up.  It could simply be a mistake, or it could be fraud.

Never accept image files of important documents.  Image files (.jpg, .png, etc.) can be doctored easily with no record of changes made.  Whenever possible, require the renter to submit their documents as PDFs.  PDF files store records of alterations so that you can easily identify any tampering.

Finally, get as much information as possible from a trusted third party source.  TransUnion is the nation’s most-trusted provider of this type of information (that’s why we use them), but there are other options that can help as well.  Using a third-party source can help verify identity and ensure that all relevant financial information is disclosed.

Consistently Prevent Rental Application Fraud 

You don’t want your company to experience even a small part of the $16.1 billion lost each year due to rental application fraud, in addition to reputation, property, or company damage. 

Avoid these associated risks of application fraud by adding Intellirent to your leasing tech stack. Our software helps ensure that all information is provided quickly and accurately from TransUnion, the nation’s most reliable source of consumer data.  Plus, it makes the whole rental screening process a breeze, automating manual processes and enabling you to fill vacancies in as little as 24 hours.

Explore other Intellirent features or schedule a product tour to learn more.


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