A landlord in Elgin, Illinois reported to police last week that a rental applicant tried to pull a scam that would have cost thousands of dollars.
According to a police report published in the local news, the landlord ran an ad in Craigslist for a vacant apartment.
After discussions with an applicant, apparently over the phone, the out-of-state tenant promised to wire $1,900 to cover first month’s rent and the security deposit.
Instead, the tenant sent a check for nearly $9,000 and asked the landlord to wire him the balance.
The landlord became suspicious according to the report, and spoke with the issuer’s bank about the check. He was told there was no such account number.
A similar scam was used against a landlord in North Vancouver last fall. Police there reported that the landlord lost almost $6,000.
In that case, the sophisticated scammer posed as an overseas doctor who needed to rent the apartment sight unseen, and sent enough money to cover a year’s lease.
A few days after making the payment, the fake doctor claimed he had an emergency and needed to back out of the deal. He negotiated with the landlord to return some of the money. The landlord returned $6,000.
A short time later, however, the bank told the landlord that the initial transaction was cancelled because it was found to be fraudulent. The scammer apparently knew that confirmation of fraud can take the bank up to 21 days. Since the landlord had deposited the fraudulent check, he was left responsible for repayment of the loss.
To avoid being ripped off by tenant scammers, police suggest that landlords avoid any wire transfer payments, because these are virtually untraceable. Similarly, stay away from cashier’s checks. These are commonly used in fraud schemes and are much harder to identify as fraudulent on the face.
Out-of-state applicants have the easiest time perpetrating fraud on landlords in part because it is easier to fake an out-of-state ID. The landlord may not be familiar with another state’s ID in the first place, and a fake is further camouflaged by email scans or faxes.
It is also easier to find landlords who do not order tenant screening reports before they agree to lease to an out-of-state applicant. This is especially true when the scammer makes the deal seem too sweet to pass up, like offering to pay more than market rate, or paying several months in advance.
Landlords can avoid many tenant scams by strictly following a diligent tenant screening process with each applicant. That process should include a completed rental application, a face-to-face interview with the applicant, a tenant background check, and talking with the previous landlord.
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).
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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.