How can a landlord help protect this business from rental scams?
The most common rental scams are identity theft and fictitious identities. Identity theft is fraud that occurs when an individual’s personal information is used without their knowledge by another individual to commit a criminal act. An applicant may use bits and pieces of the identity theft victim’s personal information, such as the victim’s true name, date of birth, or Social Security number, as well as his own information on the rental application. The applicant may be approved for tenancy based upon the qualifications of the identity theft victim. Using a variety of screenings and reference checking can help catch obvious discrepancies or red flags that need to be investigated.
Manufactured identities are fictitious identities created through the use of digital fraud. If you approve the applicant who is using a false name and background, as a tenant, he has the means to use your housing decision as a reference in obtaining credit or to commit other fraud. The tenant’s fraud may not be discovered until the tenancy is well along and may only be discovered if there is a material default of the lease.
If you use online rental applications, you should be particularly careful to verify the identity of the applicant. You will want to meet the applicant in person to review his application. An online application provides a level of anonymity that can create problems for a landlord since you would no way of knowing how the application was completed.
The simplest steps to help avoid business loss from rental scams is to recognize fraudulent behaviors, be alert to red flag issues, and thoroughly vet applicants throughout the application and interview process. Discrepancies, omissions or inconsistencies in information in the application itself, or as discovered during applicant interviews, or as revealed in reference verifications can help you identify red flag issues.
The timing of the investigation and verification process is critical to identify fraud before accepting the applicant to be your tenant. Once a tenant is installed, you must use the legal system to evict the tenant from the property and regain possession of your rental unit, which may take several months and be at great expense.