Landlords Are Being Duped by Renters Using Fake Identities
October 3, 2019
Lease applicant identity fraud is significantly growing, warns a new report from CoreLogic, a real estate data firm. Many apartment property managers are reporting some form of identity-related fraud, which is costing them thousands of dollars in losses from renters, the report says.
The two most common frauds landlords are reporting are renter applicants who are using fraudulent identities or who are misrepresenting their intentions.
The report shows the typical reasons that applicants are likely committing fraud are an attempt to live rent-free until evicted or to hide their true identity or history because of their possible immigration status, criminal history, poor credit history, or no job history.
Many of these applicants—except the ones desiring to live rent-free until eviction—are paying their rent on time. “They feel justified in committing fraud because they know you wouldn’t rent to them—for good reason—if you knew the truth,” the report notes. “The fact they pay rent on time, however, does not lessen the risk they present.”
The report calls out four main types of identity fraud that property managers need to beware:
First-person fraud (also called “muling”): The applicant (or mule) acts for another person in renting the apartment, using their identity and information. Another person—different from the listed applicant—then moves in. The applicant may be a family member or friend, or it may be a scam to rent out the apartment on their own and charge above-market fees to the person living there.
Synthetic identity fraud (fictitious identity): A scammer creates a fake identity—likely one that is taken from multiple stolen sources, often from children, elderly, or deceased people—to apply on a rental application. This is the fastest growing type of identity-related fraud. It accounts for 85% of all identity fraud, the report notes.
Third-party fraud: A person’s identity is unknowingly stolen. Their Social Security number, date of birth, or other forms of identification may be used by another person to fraudulently apply for an apartment lease in someone else’s name.
Identity manipulation fraud: A scammer slightly alters some of their information in a way that may look like a typo or spelling error. For example, a Social Security number may be off by one number or a slightly different name or an altered birth date may be noted. “The goal of identity manipulation is to confuse the system so that the application doesn’t connect to the fraudster’s true identity,” the study notes.
“How Identity Fraudsters Operate and What You Can Do to Stop Them,” CoreLogic (October 2019)
Updated: May 29, 2020