Rental Application Fraud: What Property Managers Need to Know
If you’re a property manager, you don’t need us to tell you that rental application fraud is a big deal.
But it’s not just that application fraud has skyrocketed in recent years.
What’s more important, at least for dealing with this problem, is that the drivers of application fraud are varied.
In a RealPage Survey, more than half of the 402 property managers reported seeing diverse types of application fraud, which included:
- Fake or manipulated identities (58%)
- Misrepresenting income (57%)
- Identity theft (53%)
- Site staff pushing through unqualified candidates (51%)
This means you need a multi-faceted approach that blends smart policies, processes, and people with powerful technology. And you must make it work in a way that protects your portfolio without scaring off legitimate renters.
This guide breaks down:
- The role of tech in rental application fraud protection
- What capabilities to look for in your property management tech stack
- The synergies of leasing scam and application fraud prevention
The Role of Tech in Application Fraud Protection
Multifaceted verification, real-time fraud detection, and background checks give property managers the tools to detect tenancy fraud before it impacts their portfolio.
And most PMs agree that good anti-fraud technology is the only way to reduce renter fraud effectively.
But this tech only works if you use it. And 33% of respondents in a TransUnion Survey said they don’t use formal tools and instead rely on manual resident screening processes to prevent fraud.
That says nothing of the many PMs in the middle who are using disjointed solutions.
Coincidentally, almost two-thirds (65%) of RealPage’s respondents still rely on manual methods to aggregate data across solutions.
Bottom line: Most PMs don’t have a solution they can rely on to prevent application fraud.
What Comprehensive Rental Application Fraud Prevention Software Should Look Like
As of yet, no silver bullet has been found. Until it is, preventing fraud requires a strategic scaffolding of verification at every stage of the process.
The right technology presents a series of digital checkpoints, making sure only legitimate applicants get through. And allowing for manual intervention when necessary.
Here are the key capabilities to look for:
1. Flexible, Comprehensive Applicant Screening
Your system should make it easy to screen applicants thoroughly without bogging down your team in manual credentialing.
Look for tools that:
- Provide credit, criminal, and eviction history through reputable providers.
- Allow you to decide when screening occurs — either automatically at the time of application or only after your team has reviewed the application.
- Enable applicants to cover the cost of their own screening, so you can run checks consistently without creating an internal budget burden.
2. Robust Document Collection and Verification
Fraud hides in the gaps of incomplete or unverified paperwork. And manual processes for spotting these red flags on rental applications are error-prone. But effective systems make it simple to require, track, and verify the right documents.
Non-optional document collection and verification capabilities include:
- Configurable document requirements, so you can specify exactly what’s required and what’s optional.
- Submission controls that prevent applications from being completed until required documents are uploaded.
- Digital signatures with tamper-proof backups to ensure the integrity and authenticity of submitted forms.
3. Strategic Application Processing Options
Application fraud thrives when the process is too loose.
Look for capabilities that let you strategically structure how and when applications are collected:
- The ability to require an application before scheduling a showing in competitive markets. This adds a hurdle that screens out unserious prospects and discourages fraudsters.
- Highly customizable application forms that capture the full picture of a renter — including employment, income, references, occupants, and custom questions.
- Integrated application fees that flow naturally with the process. Requiring payment not only offsets screening costs but also deters casual or fraudulent submissions.
How Leasing Scam Prevention Supports Application Fraud Prevention
A rental application scam and a leasing scam may target different stages of the process, but both share a common thread: impersonation. Leasing Scams focus on hijacking your listings and tricking renters, while application fraud is when a prospect falsifies information inside your system.
The overlap comes in the controls that verify identity and block repeat offenders. Strong identity verification measures ensure the person applying is the same person touring. Monitoring tools keep known bad actors from resurfacing at either stage.
In short, good leasing scam prevention practices reinforce application fraud prevention by detecting and stopping impersonation attempts.
For a deeper dive into leasing scams — and the four-point framework property managers can use to stop them — check out our guide on Rental Property Scam Prevention.
Time to Make a Move Against Fraud
Fraudulent applications and leasing scams are a thorn in the PM industry’s side. And it’s not going anywhere. As AI tools and other technology get cheaper and more powerful, and scammers keep cooking up new ideas, only proactive PMs can hope to detect and keep a lid on tenancy fraud.
The best time to start being proactive about fraud was yesterday. But the second-best time is today. And the easiest way to get proactive is to schedule a demo of ShowMojo.
ShowMojo helps prevent rental application fraud through a multi-faceted approach that includes robust applicant screening, superior document collection and verification, and advanced application processing features.