So you think you can catch fake rental applications? Here’s why it’s getting harder

Key Takeaways

• Rental application fraud is increasing, fueled by social media access to fake document and identity fraud techniques.
• Common fraud types include fake documents, synthetic identities, and identity theft.
• Manual review is difficult to scale due to leasing staff turnover, limited time, and growing fraud sophistication.
• Modern fraud detection combines document verification, identity checks, behavioral analysis, and synthetic fraud detection.

Social media: the new fraud classroom

Rental fraud looks very different now than it did even a few years ago. What once required specialized knowledge can now be found through a quick TikTok search. Social media is filled with step-by-step guides for creating fake paystubs, editing PDFs, and obtaining fraudulent documents.

"If you go on TikTok and search 'how to get around [ID verification],' you'll find videos explaining exactly how to do it on specific platforms," says Brendan Phillips, Product Manager at Findigs. "The information gets shared so widely now; it makes things very tricky."

This wider access to fraud tools has led to more fraudulent applications. A January 2024 survey by the National Multifamily Housing Council (NMHC) found that 70.7% of rental housing providers saw more fraudulent applications and payments over the past year. Those who saw increases reported an average jump of 40.4%.

What fraud looks like today

Let’s take a closer look at the different types of rental application fraud out there today:

• Document fraud involves falsified paystubs, bank statements, and identification. Creating these fakes has become easier through readily available online services that sell fake bank statements, provide PDF editing tools, and offer templates for fraudulent job offers.
• Synthetic fraud occurs when applicants create entirely new identities by combining real and fake information. They might use their actual name and birth date but pair it with a false Social Security number. Through careful cultivation of this synthetic identity at various financial institutions, they can build a seemingly legitimate credit profile.
• Identity theft involves using someone else's complete identity, including their Social Security number, often obtained through data breaches or online marketplaces.

Why human review falls short

Property managers face a tough task when trying to catch fraud through visual inspection alone. 

"What we hear from property managers is between 50% and 70% turnover yearly for the leasing agent staff,” says Phillips. “It is impossible to develop expertise in fraud, much less just operate your leasing procedure, if you have that kind of turnover.”

Consider a typical leasing agent's day: let’s say it’s roughly 50% showing apartments, 40% processing applications. That leaves little time for detailed document scrutiny. And even if time allowed, when faced with potential fraud flags, agents often lack the expertise to make confident decisions.

The NMHC survey revealed that nearly a quarter (23.8%) of eviction filings over the past three years were linked to fraudulent applications. The average property management company had to write off $4.2 million in bad debt over the past year, with about 25% of that tied to fraud-related nonpayment. 

The good news? There are better tools available now to support these hardworking teams and help them focus on what they do best: creating great rental experiences.

Technology's answer 

As fraud techniques evolve, technology offers new ways to fight back. Today’s fraud detection systems look beyond surface-level document inspection to analyze multiple data points:

1. Document authenticity verification operates on two levels: analyzing underlying metadata for hidden signs of tampering, while also comparing visual elements against a library of legitimate documents to detect inconsistencies in fonts, spacing, and logo placement.
2. Comprehensive identity verification goes beyond matching ID photos to selfies. Advanced systems analyze the applicant's complete digital footprint, cross-referencing key identity markers like date of birth, Social Security numbers, past addresses, phone numbers, and email addresses against historical databases to confirm the person is who they claim to be.
3. Behavioral analysis tracks subtle signs during the application process. For example, did the applicant type their Social Security number or copy and paste it? This seemingly minor detail can flag the need for deeper investigation.
4. Synthetic fraud detection identifies attempts to combine real and fake identity elements into a seemingly legitimate profile. By analyzing the age and usage patterns of identity components like Social Security numbers and contact information, these systems can spot artificially created identities that might otherwise pass traditional screening.

The key is combining these tools into a comprehensive approach. A single red flag doesn't necessarily indicate fraud, but patterns emerging across multiple verification points paint a clearer picture.

Reducing likely fraud by 44%

The effectiveness of modern fraud detection technology is striking. For example, when Findings analyzed previously approved applications for McKinley Apartments and Properties using our comprehensive fraud detection, the results showed that 44% of residents who were later evicted would have been flagged by the system.

This matters because evictions are expensive. Beyond lost rent, property managers face legal costs and extended periods with non-paying tenants still occupying units. By catching potential fraud early, properties can avoid these costly situations while keeping rental costs lower for honest tenants.

Building better protections together

As fraud techniques keep changing, property managers need better tools to protect their communities. Fortunately, technology can help spot warning signs that are easy to miss during manual review.

“At the end of the day, eviction is a lose-lose scenario for all involved.” says Liz Corrao, a member of the Findigs product design team. “Strong identity verification is a critical step to ensure residents are set up to thrive in their new home. You want to provide a smooth experience while making sure those protections are in place.”

These days, trying to catch fake documents or synthetic identities is no easy game. If you’re ready to give up the detective work, Findigs can take the burden of endless investigation off your hands. Our system brings together smart technology and human expertise to verify applications accurately while moving qualified renters forward quickly. We’ve built our technology to stay miles ahead as fraud techniques continue to evolve, so you can focus on getting authentic renters into their new homes quickly and confidently. 

You can learn more about our unique fraud protection system here.