The rise of synthetic identities in rental applications—and what you can do about it

Key Takeaways

• Synthetic identities can bypass traditional screening by combining real and stolen personal information.
• Automated, multi-source identity verification improves detection beyond manual reviews.
• Synthetic fraud increases the risk of evictions, lost rent, property damage, and subleasing scams.
• Findigs found that detecting synthetic identities before move-in could have prevented 44% of evictions in one back-test.

When a rental applicant presents perfect documentation, consistent information, and a solid credit score, most property managers breathe a sigh of relief. But a growing trend in rental fraud requires a second look: synthetic identities that blend real and fake information to create applicants who technically don't exist.

As property managers work to fill vacancies with qualified residents, these carefully crafted identities can easily slip through conventional screening processes. According to a report from TransUnion, synthetic identity fraud was the fastest-growing type of digital fraud in 2023, outpacing even account takeover and credit card fraud.

What is a synthetic identity?

"The way we generally see synthetic fraud is different from identity theft," explains Matt Lisowski, Director of Product Management at Findigs. "Identity theft would be taking all of someone's information and claiming to be that person. With synthetic identity fraud, in the vast majority of cases, what we see is someone using their real name, real date of birth, real address—everything real—and then using someone else's Social Security number. It's a combination of real user data with data from another individual."

This approach makes synthetic identity fraud particularly difficult to detect using manual screening methods, which typically focus on verifying that information is consistent across sources rather than confirming whether the combination represents a real person.

What’s behind the rise in synthetic identities?

The dramatic rise in synthetic identity fraud stems from increased access to personal data through breaches and the growth of technology that makes creating fake identities easier.

TransUnion reports that US data breaches increased by 15% year-over-year in 2023, reaching unprecedented volume. Even more concerning, the average breach risk severity (the ability of a breach to enable identity fraud) increased by 11% in 2023—also the highest ever measured.

"It's become much easier to acquire the tools needed for creating synthetic identities," notes Lisowski. "There's even something called a CPN—Credit Privacy Number—that's the same length as a Social Security number. These are marketed as ways to 'restore your credit' or 'start fresh,' but they're either fake numbers or stolen Social Security numbers sold under a different name."

These aren't just problems in the U.S. A report from Experian in the UK found a 60% increase in false identity cases in 2024 with 29% of those being synthetic: 

"Historically synthetic identity fraud was a difficult process for criminals to undertake, as they would need access to people's actual personal information, often gleaned from rummaging through bins and trawling public records of births, marriages and deaths."

Now with compromised personal data more readily available and AI tools at their fingertips, individuals can generate convincing fake identities much more efficiently.

What property managers should know

For property managers and landlords, synthetic identity fraud can lead to several issues: 

1. Lost rental income: When individuals using synthetic identities stop paying rent, you're left with no real person to pursue for payment.
2. Costly eviction proceedings: Eviction processes require time, legal filings, and court appearances that add up financially. According to TransUnion data, the total cost of an eviction averages $3,500 and can take 3-4 weeks to complete, including legal fees, court costs, lost rent, and property turnover expenses.
3. Property damage: People using synthetic identities likely have no intention of maintaining the property, potentially leading to significant damage.
4. Subleasing scams: In some cases, individuals rent multiple properties using synthetic identities, then sublet them to collect additional income before disappearing.

"We saw someone who used a stolen Social Security number to rent out more than one apartment," Lisowski shares. "They were essentially Airbnb-ing them, collecting all the money, and then they bounced. It's harder to go after them or find the person if you don't have all the right information."

Limitations of manual screening

Standard tenant screening processes were not designed to detect synthetic identities. Credit checks, background reports, and identity verification steps that rely solely on matching information across sources can fail to catch it. 

"If someone stole a Social Security number and uses it with their real name, what happens over time is it almost builds another profile for that individual," explains Lisowski. "If they had bankruptcies in the past but were able to take out a credit card or do other things with this other Social Security number, it starts building a new credit profile."

Property managers often learn about synthetic identity fraud only after the damage is done. "Often we learn it's happening during a postmortem," Lisowski notes. "After the fact, they're going back and looking at the details. Historically, property managers have thought more about pure identity theft—like someone getting someone's ID and pasting their picture on top. Synthetic identity fraud is less obvious."

Warning signs in rental applications

While synthetic identities are designed to be difficult to detect, there are some potential warning signs:

• Credit history that seems too new or thin
• Social Security number that doesn't align with the applicant's age or reported residence history
• Inconsistencies between credit bureaus
• Documentation that looks perfect but lacks the minor inconsistencies typically found in legitimate documents
• Applicant seems unusually eager to move in quickly or willing to pay more than market rates
• Contact information that changes frequently

How technology can help 

As the threat of synthetic identity fraud grows, so do the tools designed to detect it.

“At Findigs, we've created our own model where we're pulling information from multiple sources to automate detection," says Lisowski. "We can see what Social Security numbers a person has used in the past and when those numbers started being associated with their name. Often we can see what their more likely Social Security number is based on their history. If the number starts to be associated with them when they turned 18, that's probably their real Social Security number, versus another one they started using just last year."

This approach offers significant advantages over manual review. 

"Our model gives us an incredibly high level of confidence that what we're flagging actually is synthetic fraud, and we can do it in an automated way so we can process all the applications we receive," Lisowski explains.

In one back-test with a property management company, Findigs found that 44% of evictions could have been prevented by identifying synthetic identity fraud before move-in.

Best practices for property protection

While technology plays a crucial role in fighting synthetic fraud, property managers can take several additional steps to protect themselves:

1. Implement multi-layered screening: Don't rely solely on credit checks—include identity verification steps specifically designed to detect synthetic identities.
2. Train your team: Make sure your leasing staff understands what synthetic identity fraud is and knows the warning signs.
3. Document verification: Require multiple forms of identification and verify them carefully.
4. Take your time: Be wary of applicants who create urgency or pressure to rush the approval process.
5. Trust your instincts: If something feels off about an application, take the time to investigate further.

Reducing your risk 

As methods for creating synthetic identities become more sophisticated, detection methods must evolve to keep pace. The rental industry faces a significant challenge with synthetic identity fraud, but awareness is the first step toward protection.

"We try never to be scaremongering, but we're just hearing constantly that fraud is increasing," Lisowski concludes. "Something like synthetic identity fraud happens behind the scenes. Just buying an identity using social media. So just all the tools are increasing in sophistication. It's harder to detect than document fraud where a leasing agent might spot a photoshopped bank statement. That said, with the right tools and awareness, property managers can better protect their investments and reduce their risk."