4 Ways to Screen Out Fraudsters

by Chris on July 10, 2010

Some landlords feel they can sense a good tenant from a bad one. They go with their gut.

They consider appearance, or the condition of the applicant’s car, but in reality, appearances are easily faked. 

While a gut feeling is important – it is probably your subconscious telling you that something is out of sorts, to rely on that alone to avoid a fraudulent applicant is really more superstition than science. 

Any one applicant may be honest, or may be trying to defraud you. If it were easy to tell the difference, so many landlords wouldn’t be getting ripped off. 

Don’t risk your income on luck. Have a concrete plan for tenant screening that includes the following:

Discourage Fraudulent Rental Applicants 

Let every applicant know before you meet with them that you will be running a full tenant background check on each adult and asking for documentation to verify the rental application.  This will discourage fraudsters who were sizing you up to determine if you are an easy mark. 

Catch Them in the Act

Stealing a social security number or faking a driver’s license is easier than creating an entire persona that matches tenant screening reports, including previous addresses, employment and tenant credit history.  Chances are, your fraudster will have missed a step or two.  Don’t let them off the hook by allowing them to leave blanks on the rental application or avoid your questions.  Require backup documentation to verify the application, like pay stubs and bills showing the mailing address.

Keep the pressure up and they just may crack.

Verify Contact Information on References

Before you call a reference at the phone number provided on the application, check the number against the phone directory to be sure the name and address matches up.  If you have caller ID on your phone, leave and message and ask that person to call you back to see what name shows up.  

You may get more information through role play.  When speaking with a previous landlord, tell them you are calling about the apartment they have for rent – your applicant’s old place.  They may tell you they don’t own a rental, or hang up.   

 
You can also make up some fact about the rental and claim the applicant told you this.  If your ‘landlord’ confirms the story, you know you are dealing with a con. 

Another fraud-busting technique is to ask the reference for info that a poser might not know, but the landlord surely would – the zip code, the total number of units, whether there is on-site laundry.

Cross-Reference Tenant Screening Reports with Application

The value of tenant screening reports is twofold: first, you find out things about your applicant that they haven’t told you.  But you also obtain information that you can use to cross-check against the rental application and the supporting documentation you were given by the applicant.  A tenant credit report along with a pay stub or utility bill may give you clues that your applicant is not the person who they pretend to be. 

This post is provided by Tenant Verification Services, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).  

Click Here to Receive Landlord Credit Reports.

Disclaimer: The information provided in this post in not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.

{ 3 comments… read them below or add one }

Walter E Smith July 15, 2010 at 9:05 am

If you find a tenant to be fraudulent , but they pay on time what is the best course of action ?

Chris July 15, 2010 at 3:39 pm

I have to say that’s an interesting dilemma. Jurisdictions differ, but I’m confident that lying about your identity would be grounds for an eviction just about anywhere. The trouble you may find yourself in is enforcing the lease at a later date, or trying to collect for damages. As it is, you probably don’t have a valid lease. Maybe you could get creative and have the tenant sign a lease in their real name – but you are taking a tremendous risk, eyes wide open.

Marv August 9, 2010 at 1:06 pm

If you have a tenant who is deemed to have fraudulently completed a rental application , it is quitte likely that sooner or later you will the landlord will be left with rent owing, damaged rental property or both. A landlord has no idea what the intent of that Individual is, if there is criminal intent then we are talking about a host of possibilities. Who are you renting to? Someone on the run? It is my opinion that when a landlord finds that he/she received a fraudulently completed rental application, a notice to quit is the best route to go. In addition a report to the Police Office should be filed for records and information purposes. If the Individual has a vehicle or friends visiting who have vehicles, record the lic. plate #’s. Worst case scenario I guess is that you are harboring a criminal or an Identity Thief or any combination thereof. http://www.criminalfraud.com and click on landlord fraud for more details.

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