Fraud in Multifamily Housing
The rental housing industry is not immune to fraudulent activities, as there are individuals who try to circumvent the systems in place for personal gain. From fake paystubs to fraudulent support animal documentation, to synthetic ID and application fraud, rental housing teams face a range of potential scams on a daily basis. It’s extremely important to employ advanced tenant screening methods when accepting applicants for your rental properties.
The use of fake paystubs by potential renters seeking to appear as though they earn more money than they actually do can have serious consequences for rental-housing operators. In order to avoid falling victim to this type of fraud, it is recommended to avoid searching for “fake paystubs” online.
When the place of employment is difficult to verify through a simple search, it can indicate a potential problem. The industry is working to address this issue by utilizing technology that can instantly verify bank account information and thoroughly examine financial documentation. This helps to reduce the risks associated with fake paystubs and protect rental-housing operators.
Fraudulent Support Animal Certificates
If your property is pet-friendly, there are additional precautions you should take around accepting pets. While not as many websites exist specifically for this purpose compared to fake paystubs, it is still possible to find fabricated letters from healthcare providers claiming a pet as a support animal, such as an ESA. Some individuals use this tactic to avoid paying pet rent, as communities cannot charge for a verified support animal.
Others may be attempting to bring a restricted breed into a rental property by pretending it is a support animal. These renters may be willing to pay regular pet rent, but are unable to do so if their pet falls under a restricted breed or weight category. Service and support animals are exempt from community-imposed restrictions, leading some individuals to believe this is their only option to keep their pet. A case-by-case evaluation could be a more effective approach rather than blanket breed and weight restrictions, but that is another discussion.
Verifying the documentation for assistance animal requests can be challenging for onsite teams, who may not be familiar with the nuances of reasonable accommodation laws. Fortunately, rental communities can utilize third-party services to handle this task, where a team of experts can review the request and make a determination.
Synthetic identities are created by combining real and fake information to create a deceptive identity. This type of fraud is difficult to detect as certain aspects of the identity can appear to be valid. Scammers may use a real name with a fake social security number or vice versa. They may also manipulate family names and employment histories to create a fake identity. If they are successful in their efforts, they may occupy a rental home for several months, default on payments, and eventually disappear without a trace, as their identity is not real.
However, with the advancements in identification verification software, the chances of these fraudsters infiltrating rental homes is decreasing. This type of fraud is not the only one that the rental-housing industry faces. Some scammers target sensitive information such as personal details of renters or financial information of vendors. But, with the improvement in cybersecurity and third-party resources, the industry is better equipped to combat the various types of fraud it encounters regularly.