How to Combat Tenant Fraud

by Chris on March 11, 2013

March is Fraud Prevention Month and RCMP is encouraging all Canadians to “Recognize it, Report it, Stop it!”

Every year, thousands of Canadians fall victim to fraud. Most people don’t think it could happen to them, but fraudsters are using increasingly sophisticated methods to target Canadians of all ages and from all walks of life.

“Canadians need to be vigilant about fraud not only during the month of March, but all year long and through public awareness, Canadians can be informed about how to better protect themselves,” says Vic Toews, Minister of Public Safety.

While some fraudsters are amateurs, RCMP is seeing more and more of these schemes being attributed to organized crime. The impact on individuals, families and businesses is devastating – retirement savings, homes, businesses and in some cases, lives have been lost.

The good news is that the majority of fraud can be prevented by identifying the methods used by fraudsters. The more you know about a fraud, the less likely you are to fall for it.

Rental businesses are by no means immune to fraud schemes. There have been a number of recent scams that have cost landlords:

A tenant who used another person’s identity when renting in order to hide a criminal background;

A tenant who lied about being employed while facing a half-dozen evictions for failing to pay rent;

A tenant who pretended to be well-off, but failed to pay rent to multiple landlords;

An Internet scammer, pretending to be a doctor, who paid in advance for a property he’d never seen, then asked for the money back. It took nearly three weeks for the landlord to discover the scammer paid with a fraudulent cheque;

Tenants who used false identifies when leasing, then set up marijuana grow operations in the rentals;

A tenant who was found to have lied on his rental application, and another who doctored the supporting documentation.

Numerous tenants who have used dishonest excuses to delay eviction hearings and continue to live rent-free, many times damaging the property;

All professional tenants who habitually pay late or fail to pay rent at all.

RCMP says being cautious is something to be proud of, and that rule clearly applies to landlords.

To put an end to rental fraud, exercise both vigilance and skepticism when it comes to choosing tenants. For instance:

Always verify the identify of the rental applicants under consideration. Ask for a photo ID. Make sure to verify the person’s identity before a property tour to minimize safety risks.

Always run a credit check on the applicant before leasing — even if the person appears highly qualified.

Verify the person’s employment and income.

Speak with previous landlords. Approach the reference with skepticism and verify this is not just a friend of the applicant. The best policy is to speak with two previous landlord references to rule out bias from a current landlord trying to offload a problem tenant.

Try to stay ahead of fraudsters. Make tenants accountable for on-time rent payments, and act quickly at the first sign of trouble to minimize income loss.

Over the next four weeks, RCMP will be participating in a series of local and national fraud-awareness initiatives. To help reduce your chances of being victimized by fraud personally and in other business dealings, you can consult the RCMP’s website during the month of March for tips aimed at keeping you safe from scammers.

This post is provided by Tenant Verification Service, 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.

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