In a recent video podcast, Krista and Jonathan dive into the pressing issue of rental fraud, a concern that has impacted or is known to 40% of Americans, resulting in an estimated loss of $16.1 billion in the current year. They explore various forms of rental fraud, including the troubling trend of faking pay stubs and income verification, offering landlords critical insights and preventive measures.
Understanding Rental Fraud
Rental fraud encompasses a range of deceptive practices from faking pay stubs to illegal subleasing and money wiring scams. The ease of access to photo editing software and services that create fake pay stubs for as low as $5 poses a significant challenge for landlords in verifying tenant income accurately.
Spotting Fake Pay Stubs
Jonathan highlights several red flags indicating potential pay stub fraud, such as interchangeable use of zeros and ‘O’s, misalignment of numbers, lack of professionalism, and rounded income figures. These signs should prompt landlords to scrutinize the documents further.
Verifying Tenant Income
For thorough income verification, landlords are encouraged to research the company issuing the pay stub, verify employment directly, and consider alternative documents for tenants with non-traditional jobs, like freelancers, including tax forms and bank statements.
Addressing Suspected Income Fraud
If a landlord suspects income fraud, they should approach the situation with care, requesting additional documentation to verify the tenant’s income. This step is crucial in distinguishing genuine applicants from potential fraudsters without discriminating based on income source.
Handling Tenants Who Fake Income
Dealing with tenants already in residency and suspected of faking their income requires gathering all relevant documentation and consulting with a legal professional to navigate the potential eviction process.
Preventing Rental Fraud
The key to preventing rental fraud lies in diligent tenant screening and utilizing tools like TurboTenant’s Income Insights. This feature, provided through TransUnion, offers landlords an additional layer of verification by comparing self-reported income against TransUnion’s data, helping landlords make informed decisions.