4 Rental Scams Property Managers Should Watch Out For — And How to Prevent Them

Rental fraud is rising, and property managers are increasingly paying the price.

Since 2020, the Federal Trade Commission has received nearly 65,000 reports of rental scams, and that number is likely a fraction of the incidents that actually occur.

For property managers, the consequences are costly: lost revenue, extended vacancies, legal fees, and property damage.

Scammers are becoming more sophisticated, but understanding the most common tactics can help you stay ahead of them.

Avoid These 4 Common Rental Scams

Application fraud occurs when applicants intentionally provide false or stolen information to secure a lease. It’s a widespread problem in the rental industry, where application fraud has jumped as high as 50% in some cities.

These scammers might be trying to bypass leasing requirements to secure a rental unit they would otherwise not qualify for, or they may have intentions of squatting, vandalizing, or stealing.

Regardless, application fraud is a headache for property managers. Here are four common application scams and how to protect your business from them.

1. False Employment Records

Applicants may provide fake employment records or paystubs if they believe their actual employment history would disqualify them from renting the unit.

Always call the applicant’s employer to verify employment. Do an online search and check LinkedIn to confirm the company’s validity.

Review documents carefully to check for discrepancies in numbers. For example, seeing all numbers rounded to zero on a paystub would be unusual. Paystubs should also include an employer’s name, address, and company logo.

2. Fake Credit Reports

Some scammers provide a self-generated or altered credit report. They act as if they’re saving you the trouble of running your own credit check, but their aim is to deceive you.

Always conduct your own credit and background checks using trusted sources.

3. AI-Generated ID Documents

AI tools are making it easier for scammers to generate synthetic identities, convincingly mixing real and fake information.

Use multiple verification methods to double-check a prospect’s identity (e.g., a background check, credit check, and employment check). The more ways you verify a prospect, the more likely you’ll be to catch false information.

4. Stolen Listings

Listing fraud is on the rise. Instead of impersonating applicants or prospects, scammers are now posing as landlords to take advantage of unsuspecting renters. News stories out of New York, California, and Wisconsin demonstrate just how sophisticated scammers have become.

They steal photos and descriptions from valid rental listings to create their own fraudulent listings. They draw in prospects — who eventually send the scammers money for application fees or security deposits — by listing the units below market value.

Some fraudsters even break into units and hold unauthorized showings to make the process more convincing to prospects.

This type of fraud is particularly frustrating because it creates victims out of both property managers and prospects. Property managers suffer damage to their brand reputations and may need to pay legal fees to resolve the situation. Prospects lose hundreds or thousands of dollars and may be unexpectedly left without a place to live.

One simple prevention tactic is watermarking your listing photos with your company name, logo, website, and phone number.

You can also set up Google Alerts for your property addresses to be alerted if web pages containing those addresses pop up online. Or invest in a service that scans the web for fraudulent listings for you.

How ShowMojo Helps Property Managers Prevent Fraud

Fraud prevention has become a priority for many property managers. As industry commentator Peter Lohmann noted in a recent episode of his podcast, “Screening and verification are really hot topics with property owners right now.”

Here are some of the built-in safeguards you’ll find within the ShowMojo platform. Keep an eye out for more to come — we’re always optimizing to outsmart scammers.

1. ID Verification

We work with Experian — the same credit bureau trusted by major banks — to verify prospect identities. This not only provides extremely secure automated verification, but it also removes the need to manually verify documents.

2. Self-Showing Security Features

Self-showings can help grow your portfolio, but they’re not without risk. Here are some steps we take to help prevent fraudulent activity.

• No Self-Showing Designation: To prevent scammers from targeting vacant units, we don’t openly advertise listings as self-showings.
• Anti-Fraud Scheduling: Our system won’t let prospects sign up for multiple showings at the same time and limits the number of showings a prospect can sign up for during a specific time frame.
• Location Services: Prospects must turn on their phone’s location services to verify they’re actually at the unit before receiving an access code.
• Phone Call Verification: Alternatively, require the prospect to call you when they arrive at the unit to receive the access code. This is also an opportunity to do a soft screening and “feel out” the prospect.

These features help keep the property — and your business — secure.

3. Blocking Suspicious Activity

Our system monitors suspicious activity and blocks any contacts it flags as suspicious. If you choose to enable it, our system can also block VOIP calls, so prospects must call from an actual phone rather than a computer.

4. Anti-Fraud Acknowledgement

The Anti-Fraud Acknowledgement is an optional step that property managers can add to the scheduling process. It asks prospects to check a box to confirm they’ve read a message clarifying contacts and communication expectations.

This positions your business as security-minded while educating prospects about the risk of fraud and assuring them that they’re scheduling a legitimate showing.

Stay Ahead of Rental Scams

Fraud tactics are evolving quickly, especially as AI tools enable scammers to scale up their operations.

For property managers, preventing fraud is now a routine part of running a modern leasing company.

That’s why ShowMojo continues to build security features directly into the leasing workflow, from identity verification to self-showing protections and fraud monitoring.

You might not be able to eliminate scams entirely, but the right tools and processes make it harder for scammers to succeed — protecting your properties, your prospects, and your reputation.

Schedule a ShowMojo demo today to learn how we can help turn your leads into leases.