5 Scams That Trick Landlords Into Accepting Less-Than-Stellar Tenants

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Tenant screening scams are everywhere. If you don’t believe that applicants will come to your table looking to scam their way into a home or apartment that they have no intention of treating reasonably, you haven’t been a landlord for very long. Here are a few common ways we’ve seen other landlords get taken in.

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5 Scams That Trick Landlords Into Accepting Less-Than-Stellar Tenants

The False Credit Report

It can seem like a nice gesture — the tenant brings their application, a tidy little pile of supporting paperwork, and a copy of their credit report. You just saved yourself the credit report fee! Right? Hell no.

Here’s the deal: this is the era of technology. Any slacker with a $200 refurbished 2005 computer and a free afternoon can whip out a pirated copy of Photoshop and edit literally any document they have. If it gets a roof over their head, why wouldn’t they? After all, it only takes one edit and you can give the faked document to dozens or hundreds of landlords — it just takes one mistake (or a lazy landlord!) to get into a home knowing full well you can’t pay for it.

Related: 10 Glaring Red Flags That Indicate Your “Great Deal” May Be a Costly Scam

The Fabricated Proof of Residence and Employment

Did you know that there is a market for fake pay stubs and W-2s? It’s not even illegal to create and sell them to criminals intent on pulling tenant screening scams! Sure, the tenant risks being arrested if they use them, but one of the advantages of such fakery is that you never end up seeing their real name, address, or potentially even phone number, if they go so far as to buy a burner phone.

It’s up to you as the landlord to research these details — does that workplace even exist? When you attempt to call their previous landlord, ask for someone fictional. If they’re faking, they’ll generally tell you who they really are when asked if they’re a nonexistent business — but if you ask them, “Are you the landlord at Byron’s Apartments,” well, of course they’re going to say yes. They’re in on the scam, after all.

tenant-funnel

Cash Up Front for an Immediate Move-In

It can be extremely easy to say “yes” to someone who offers you six months’ rent up front for the opportunity to move in tomorrow — after all, if they have that kind of money, they’re going to keep having that kind of money, right? Yeah, right! Any attempt on the part of a tenant to convince you to skip the screening process should result in your immediate and instinctive slamming of the door in their face. It’s far too easy for a criminal, be they crook or con man, to come into a one-time pile of money and have zero plans for making more.

Oversized “Employer’s Checks”

This one is less common now than a decade ago, but it still happens often, particularly to businesses with a notable online presence. You’ll get an email from an applicant that seems entirely right, but they’ll note that they’re being moved by their employer, who will send you a check to cover all of the initial expenses. When you get the check, it will be over by some amount — sometimes there’s an extra zero on the end or sometimes it’s a reasonable-seeming “mistake,” like they doubled the security deposit. The person will ask you to cash it, use the portion you were asking for, and send the overage to someone.

Naturally, the check was never real, it will bounce, and you’ll be out whatever amount you sent away. You can avoid this by simply never cashing a check that isn’t for the correct amount or by cashing it and then waiting for the money to clear and show up in your account before you do anything with it. Of course, you may still have to deal with potential bounced check fees from your bank.

newbie-mistakes

The Six Months’ Advance Sublet

This is a brutal scam because the tenant is the victim just as much as you are. You’ll be advertising a property, find a seemingly-perfect tenant, and get them moved in. The first month’s rent will come in on time, no problems — but the second or third month will be late. You’ll head over to knock on their door and encounter someone completely different living there. When you ask for the tenant by name, the person living there will have no idea what you’re talking about and explain that they already paid the first six months’ rent to the landlord, who is not you.

Related: It CAN Happen to You: How to Guard Against Dangerous Real Estate Scams & Squatters

Essentially, you took in a scammer who turned around and advertised your property, filled the “vacancy” with a commitment of six months’ rent up front, and then vanished into the sunset, leaving you with a tenant you haven’t screened and who insists that they can’t afford to pay rent a second time. Again, rigorous examination of every detail of the application and supporting paperwork, expecting a scammer, is the only way to catch this before it begins.

In short, when it comes to avoiding tenant screening scams, be prepared to put in ALL the work, every tenant, every time.

Landlords: Have you ever encountered these scams? What would you add to the list?

Leave a comment!

About Author

Drew Sygit

Drew is the manager of Royal Rose Property Management, a fairly high-tech solution for Detroit Metro area property owners & investors.

34 Comments

  1. Curt Smith

    I’ve seen “fake pay stubs” advertised on craigslist. They even said they are the “best” vs the other guys. LOL they took pride in their work.

    I’ll add to never take applicants in the 4th week of the month for the 1st move in. You are better off risking loosing someone good for the 99% chance this is someone being evicted,,, or the very VERY best someone who is not a planner. You don’;t want reactive renters, they will be the same with their cash management and always be short come rent payment time.

    Never break up move in over months. Same problem, non-planners.

    In my area, the best indication of a good renter is simply having a bank account with some decent balance. Maybe not quite 2x rent, but equal to rent. But if they have over 2x rent that is a good prospect, depending on credit check, calling employers and current landlord.

    Yes the bank statement can be faked too. Have them bring up their balance on their smart phone in front of you. No personal info is visable.

    2 tips: always walk them out to their car, look inside. How they keep their car insides will be how they keep your rental. I can attest to this working every time, even my own family. 🙂

    Ask this simple question: “why do you want to live here, in THIS rental?”. The answer has to be some sticky reason: my father lives near by, my kids are in the same schools, my job is near by. If there isn’t a sticky reason I don’t take them. I’m that dead set on must have a sticky reason for being in my rentals I wait till I find someone with relatives etc. It’s easy for my rentals though, all are in top high schools. Out of the very infrequent turnovers I find a good family needing to keep their kids in the top local schools. I never hear from those guys. 🙂

  2. Drew, great article!

    Curt Smith brings up some good points and additional ways to screen, screen, screen tenants.

    In regard to the credit report, because a person gets ‘dinged’ every time one is run for them. I give them their credit report, if I do not accept them. They have paid for it and it is theirs. I think that it is the right thing to do. Now, given the extent of what a credit report entails (even reading one correctly takes some know-how) I’m not sure that someone could forge that information on their own computer. However, if the report just says a number without all of the cycles of payments made etc. then no, I would not accept that.

    I try to consistently treat people fairly. Even the ones that I do not accept, I try to do the right thing by them. Call it karma or whatever, but I think that my frame of mind has made me successful in this business, after 16 years. My two cents for what it’s worth!

    • Drew Sygit

      @JAMES: Sounds like you meet all your applicants, so you can make a “gut” decision also. Be careful about giving out copies of credit reports. In many cases, doing so technically violates your agreement with the credit report vendor. Ask yourself, last time you got a mortgage from a bank did they give you a copy of your credit report?

        • Drew, I also received my credit report in December, 2015 when I refinanced a rental. I simply asked that a copy be sent to me and the refi company did so. Thanks Lacey, for chiming in!

  3. I often drive to see the previous address. You can get a good idea on how they will treat your place. Look on Facebook and other social media. We dropped promising tenants super fast once we saw their antics on Facebook. If you have a golden opportunity to talk to a applicants previous address neighbor do it. They can really drop some bombshells. Its a little more work but you are putting them in custody of a lot of money.

  4. Letisia Crespo

    Great Topic and good points! As a realtor I cringe every time there is a real estate office wanting to charge my rental clients a fee to screen them, when I know credit reports are free, and background checks are cheaper by having them picking up their own report at a police dept. instead. I’ve always seen it from another point of view of the industry ripping off hard working rental tenants. However, I’ve never come across fake pay stubs or credit reports yet. I can see how this article can make any landlord paranoid.

    • Jerome Kaidor

      Huh? Where do you get those free credit reports? I pay $32 per tenant for the credit,eviction, and criminal reports that I run. I charge the prospective $20 and make all the phone calls first, and if I’m not happy with the phone calls, I give them back the $20. If I actually “run their stuff”, I keep the $20 whether I take them or not.

      As far as I know, everybody charges to do credit reports, and NOBODY but me ever returns the fee.

      As I explain to the prospective, I don’t make much money off those reports. Either I spend $32, or I give it back. Like Lucy, I hope to make it up in quantity
      ( really dated myself with that one ).

      As far as the tenant picking up their own background checks – no WAY. See the original poster’s text about how printouts can be faked. That is ABSOLUTELY TRUE. A $50 copy of Paperport will do that just fine, although it’s fiddly work
      getting the fonts just right.

      • Jerome, you are not the only landlord who gives back the $20. I do the same thing. I think that it’s wrong to keep it, when I didn’t do anything for it. Kudos to you for having the same principles!

        Luckily in WI we have Wisconsin Circuit Courts (open court system) and can look up ‘rap sheets’ on prospective tenants. This saves me a ton of time and has saved me a ton of money! WI does get some things right and this is one of them, i.e. open court system. It’s hard to believe, some legislators have been trying to shut it down though, because they claim it violates and individuals privacy. Thank goodness being a pedophile or other criminal is not kept secret from law-abiding citizens. We have a right to protect ourselves!!!

        • Deanna Opgenort

          I do extensive reference check before they get to do the background check, I give every applicant at least 3 chances to “come clean” about anything that MIGHT be on their background/credit/criminal/eviction report (MySmartMove). After that, if I decide against them for something they told my about I’ll pay for the report. If I accept them I credit it against the first month’s rent. I do tell people that if they don’t tell me everything& I find out stuff (criminal) then they don’t get their money back (I tell them repeatedly that the background check I do is VERY thorough, and I will find EVERYTHING. Really. Everything.Even that ticket you got for not fastening your seat belt.).
          In practice the only time that happened I DID send them a check to cover it (extenuating circumstances) & they never cashed it. Go figure. I also sent them copies of the reports so they could see what was on them. I’ve always kind of wondered if either they felt guilty for lying or used the reports for a different rental that they got. I really liked them, and had they not lied I would likely have rented to them. As it is I got significantly better, amazing tenants, though I had almost a month of vacancy in the process, vs 1-2 days. I only expect my current tenants to move when they buy a house (likely a few years off). IMHO there is nothing better than a tenant looking to buy a house in a few years— $$$Thousands in the bank saving up for the downpayment, and SO careful about paying bills & staying on top of finances!

    • Drew Sygit

      @LETISIA: we admire your concern for your clients money, but fees are part of the process. Please keep in mind, a Realtor gets paid to find an acceptable tenant TO THE OWNER/LANDLORD. It’s not up to you what the landlord’s application process is as long as it doesn’t violate any laws. Also, a Realtor is done with the transaction (and paid) once the lease is signed, but the owner/landlord has to deal with the tenant (headaches) for the term of the lease!

    • Letisia, I’m also a realtor who has handled both landlord and tenant clients. I always advise my renter clients to go to annualcreditreport.com and get a copy of their credit report. It’s free once a year, and that way they can save on the fees, although they’ll have to pay about $8-9 to actually get their FICO score. And it is completely legitimate,

  5. Jerome Kaidor

    I make good use of Google Streets. I go look at all their previous addresses. Sometimes, there’ll be a “for rent” banner out front with a phone number. Maybe that number is different from the number that the tenant gave on the application.

    I had one prospective where that was the case. Called the number on the banner: “We’re evicting that person”. Another one gave an address that turned out to be a tropical fish store. Bunking with the Bettas? She called me, I told her. “Does that mean I don’t get the apartment?” “Yep, that’s what that means”.

    Tenant screening is a bit of an art. At the level of properties I have ( that I can afford, and that cash flow ), I don’t have the luxury of demanding a specific FICO. Also, there really are no
    good online criminal checks. Even if there were, there are LOTS of ways a tenant can bring you grief without winding up with a criminal record.

    I had one tenant on whom I had gotten a clean criminal check – turned out she had a prior for armed robbery. She asked “didn’t you check me out?”. The robbery was under her maiden name. Strangely, she was an ideal tenant. Since then, I have gone to a criminal check that takes the prospective’s SSN, not only their name & birthdate.

    Another one had a good credit score ( with an actual FICO! ) was running a couple of small businesses – everybody spoke highly of her. I wondered “why did she want to move into my apartment?” She just didn’t fit the pattern. But I couldn’t figure out a reason to refuse her.
    Turned out, the apartment wasn’t for her, it was for her drug dealing auntie. Eviction!

  6. Adam P

    I would add, many states / cities have available online the ability to view the owner of a property. Every landlord reference must match the owner of record in my checks OR a large established property Management Company (where my phone number matches the google results).
    This helps weed out the fake references. I am interested to hear what people are judging on Facebook? Clearly if they are complaining about their landlord in status updates that is a flag, but just because someone is in a messy home in a picture, it may not even be their home.
    I personally rent, and as a consultant have often signed leases with short notice (on a new project in a new city). By having a strict rule of not letting at end of the month for the first, you may be ruling out higher income earners who are moving for work.

    • Drew Sygit

      @ADAM: all good points. We don’t mind rushing an occasional application at the end of the month, we just don’t cut corners because the applicant is in a hurry.

      Regarding using Facebook to screen, we look for comments about their current landlord or financials that show a problem. Such as, “why is my landlord always hassling me about my rent? I’ll pay it when I’m good and ready!” or “I’m getting evicted and got to move, anyone know somewhere I can move quick?”

  7. Donald Tepper

    Check references.

    It’s certainly possible that a scammer will provide fake references or references of friends who’ll vouch for him/her. But as a landlord, I can tell you that few landlords check references. My tenants in one property over the past 6-7 years have included two college (graduate) students, a family of 3, and another family of 3. The college students were consistently late in paying rent. They built a cinderblock fire pit in the back yard, and installed a Kegerator on the deck. They never switched some of the utilities into their names (and it’s against state law for a landlord to cut off utilities), so they got some free utilities.

    The first family turned out to be the tenants from hell. Nothing was ever right. The farther we bent over to accommodate their requests, the more they took advantage of it. They finally moved out, threatening to sue us or report us to the county inspectors.

    The second family was better. However, their lease was up in May. They initially said they wanted to move at the end of the lease. OK. Then they contacted us and asked if the lease could be extended. We said OK. Four months later, they notify us they’re moving out. Turned out they’d been trying to buy a house. The first deal fell through; the second didn’t.

    Yes, we made some mistakes along the way. But the point here is that NOT ONE of their new landlords (or lenders) ever contacted us for a credit or reference check. Not one. (Maybe one or more provided fake references. So: Verify references.)

    Leopards don’t change their spots. And tenants who behave badly in one property are likely to repeat the pattern at the next. Some of those tenants, in retrospect, were scammers. Some may just have been bad tenants. In any case, I suspect that some of the new landlords for these tenants may be running into some of the same problems we did. And all it would have taken was a simple phone call to us.

    So: Ask for references. Then check them out.

    • Donald, I agree. It’s amazing how few landlords check references. I am not one of them and it has always been worth my time. I actually tell prospective tenants that if I have a hard time getting ahold of their previous TWO landlords, I will eliminate them from the process, so those people better be ready to take my call. The prospective tenant is either very cooperative OR he/she disappears. Saves me a ton of headaches. Screen, screen, screen ALL prospective tenants!

    • David van Brunt

      Out of curiosity– are there limits on what you can say when someone claiming to be a new landlord calls and asks for a reference? I know for employment there are so many restrictions that it pretty comes down to all you can safely say is “they worked here”. I wonder if there are risks in being too honest, or if it’s enough (and allowed) to simply report the facts of payment history, and if you would rent to them again.

      • Drew Sygit

        @DAVID: as long as someone sends an acceptable signed authorization you can share any FACTS you want. You have to be very careful though, not to share your OPINIONS, which could be a violation of privacy and/or Fair Housing regulations.

        • Jerome Kaidor

          Many management companies do NOT give tenant references over the phone. Rather, they say “send us a fax”. You send the fax, consisting of your questionnaire and the prospective’s signed application, and they then fax you the answers.
          I believe the reason for this is that anybody can sue anybody for anything, and if the person sues the management company for libel/slander, the company can produce the fax and say “This is what we said about this person, and nothing else”.

    • Drew Sygit

      @DONALD: you’d think as a property management company a higher percentage of landlords would contact us regarding VOR’s. Actually very few do!

      Just imagine if the majority of professional and DIY landlords checked with past landlords and how that would affect the deadbeat tenants — they’d have to clean up their acts/credit or get stuck living where appropriate.

  8. What can Facebook tell you.
    … .A photo of the applicant with their group of friends and you know you don’t want them in your rental.
    … A comment like “we gonna party all weekend until we are smashed” and you know not in your place.
    … A comment like they can” take the job and shove it” and you know you will soon have no rent payment.
    … They are shutting of the gas…..The police were here last night… My dog is always escaping…
    Do you really want to get involved with these people. Its all on Facebook.

  9. Jerome Kaidor

    …and on those landlord references…. I always try to do a little “landlord chat” with the voice on the other end of the phone: “Say, how many units ya got there?” If the answer is not instant and positive – it’s not the landlord.

    • Drew Sygit

      @JEROME: we look up the owner in public records before calling, so we have a better idea of what type of questions to ask. We even do this with applicants that claim they are living with relatives because many are trying to hide the fact they are actually being evicted. It’s another reason to pay attention to the address on all the documents they turn in as we check all of their addresses out!

  10. Sam Tato

    Great tips here. I might add that just because the money from the oversized employers check shows up in your account doesn’t mean that the check won’t bounce later. In NY, by law the money will be deposited into your account and then can be later withdrawn by the bank if they discover that it was a fake check, leaving you responsible for the entire amount. Sometimes it could take weeks for them to discover it. This may be only for cashiers checks but I would be cautious about all large checks.

  11. Ashish Patel

    Great article.

    When it comes to an “Oversized “Employer’s Checks” be very careful. Most people think that when the money is in their account then everything is clear but it can take 2 weeks or more for a check to be fully “cleared” even though the bank will put money in before that.

    If you get an oversized check or think there is a scam the best thing to do is mention it to the bank when you are depositing it.

  12. Curt Smith

    FWIW HUD is working up a head of steam to make pulling criminal report and denying on the basis of past criminal record descrimination. They’re adding this to the Fair housing regs or in the process. Well meaning but…

    http://www.npr.org/sections/thetwo-way/2016/04/04/472878724/denying-housing-over-criminal-record-may-be-discrimination-feds-say

    Beware having writen or verbal requirements saying no criminal convictions. Soon enough folks with jail records will know this and report you. I’m not spreading FUD but letting folks know about criminal back ground checks have a down side or will so.

    For me, it’s always been: job job job, savings savings savings, good past renal refs and WHY do you want to live here? The answer needs to be: keep my kids in the same schools, relatives live near by, weaker but still good enough is my job is 10 min away. I prefer schools or relatives to be the sticky factor.

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