How to Spot Fraud on a Renter's Application
As an investor we must learn to become acquainted with some of the recent tactics used by renter's wanting to deceive us. They figure they can fool the small fry, but not the larger corporation. So they look for the small investor and the way they reveal their intention to defraud is via the rental application.
The rental application is our attempt to get some background and history on the future renter. They rely on our lack of time or inability to contact information provided on the application.
So, here are four areas to look at closely.
- Name: Using two first names as the given name. Unusually sounding names which may not be recognizable or possible to pronounce. You may have heard of Tiger Woods, Magic Johnson, Bo Jackson, just to name a few. Of course these aren't fake names, but you get the point.
- Employment: Watch for misspelled or unusual job titles. Make sure the job title fits the type of work defined. Watch for salary ranges or quoted numbers to the penny to see if they fit the position. Look at the years of employment in relation to the age of the applicant. Does this seem out of range? Be careful of the unidentified employer responses to your calls. If the employer doesn't provide the company name upon answering the phone, that could be a clue. And finally, watch the net vs gross income statements. If they are the same or close, this could be a clue.
- Bank Accounts: Omitted account numbers or reference numbers abbreviated or the use of strange symbols. Credit references in the same sequence as on the credit report or unknown companies. How about recently opened and closed accounts. Here's a shocker, references that don't know the applicant.
- Other sections of the application: Applicants use of PO boxes for references or addresses, applicants having different last names. How about identifying the credit card by the first four digits. Each credit card company is unique in it branding, know what belongs to VISA, MasterCard and American Express. Another obvious one is the area code for the phone number isn't correct with the address listed. And here's a creative one, a nearest relative who is a professional in the attempt to build credibility.
If applicants are attempting to provide you with deceptive material facts, look out! As a landlord, you must treat your business as a business. Sometimes you have to do the dirty work, but learn to screen and scrutinize the application carefully. Do the background checks, for credit, criminal and evictions. Better screening brings better renters or tenants!
Good luck to you and may you prosper well!
David L. Britt
Olathe, Kansas
http://www.davidlbritt.com/
http://www.heritage.net
http://heritagerealestateteam.com
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I take exception with the last name idea - I am married and have never assumed my husband's name - so if I signed using it then it isn't "my" legal name. Many of us gals who started careers well before we married (or our careers are tied to our name (ie MDs, lawyers, RE Agents) don't change them for that reason.
Sondra, exceptions are the rule. I do understand their are many people who have different last names and these can be easily explained. I only point out this COULD be a clue, not that it is the rule. Thank you so much for pointing this out. And it is duly noted! Thank you!
good post. I never had the renter fraud problem like this. I am very thankful to have learned that one early. I had renters in already that where frauds..I had to get them out.
Dave, getting them out can be an issue depending upon the state in which you live. Some states allow renters an opportunity to fight and this can cause it to take a long time to evict! Glad you were not caught in this delimma. Thanks for commenting!
I completely agree. Recently on one of my rental applications, I was given a social security number that belonged to two people plus other interesting info. Needless to say..........
Thanks for the info...as a LO and access to pulling credit reports, I always do that for the tenants of my 2 rental condos, but I guess I do need to take it a step further and actually call references, etc. But I figured if someone was going through the trouble of stealing someones SS# and then making a near perfect drivers license to back it up that they obviously would have scam name and numbers of references as well. And of course I make sure the deposit and first rent check clears first before I give them the keys.
Teri, you did well!
Shane, You have an unfair advantage to most of us. Good advice on the deposit and rent check! Thanks for providing your knowledge!