February 3, 2025

Employment Verification Scams to Look Out For

Cliff Unger

Chief Revenue Officer

Why Employment Verification Scams are a Growing Concern

Around the world, rising costs of living and housing shortages have made rental applicants desperate to stand out in competitive rental markets. Inflation and unstable job markets add to these pressures, impacting many families’ finances and income sources.

Under these circumstances, some renters feel compelled to take extreme measures to secure housing. They’re willing to go to great lengths to submit a “perfect” rental application—and sometimes that means falsifying or fabricating their proof of income.

Typically, potential tenants submit fake employment documents to bypass tenant screening, stand out from other applicants, and get the rental.

Consequences of these employment verification scams include:

Securing unreliable tenants without a legitimate job, reliable income, or financial means to pay rent. These renters might leave you with unpaid rent, deposits, and other expenses, and are more likely to end in eviction.

Financial losses. The financial impact of fraudulent tenants can be devastating. 77% of property manager say fraud reduced their income or increased costs by 10-20%. These tenants may cause significant property damage, leading to costly repairs and renovations. And if they’re not paying rent or funding repairs, property maintenance could become a challenge.

Legal risks. Employment verification scams can expose property managers to significant legal liabilities, like costly disputes or lawsuits. Failing to properly vet tenants could also violate local or federal regulations, potentially leading to fines or other penalties.

To avoid tenant fraud from wreaking havoc on your business, keep a pulse on common scams and stay vigilant during employment verification.

Common Employment Verification Scams

Fraudsters have mastered the art of deception and creating fake documents—making it hard to identify fraud unless you know what to look for. There are dozens of ways employment fraud can manifest, but most scammers commonly use fake pay stubs, bank statements, and more.

Fake Pay Stubs

Many applicants submit fabricated pay stubs or fake W2s during the rental application process to inflate their proof of income and appear financially stable. And with the rise of fake pay stub generators, it’s never been easier to do so.

Pay stub generators typically charge a small fee to help potential renters create realistic pay stubs in minutes. They may look legitimate but typically include small details that signal the document is fake.

A pay stub or W2 is likely fraudulent if you spot:

Inconsistent formatting and layout
Questionable employer information
Round income figures (like $50,000)
Unusual tax deductions
Mismatched dates

Fake Bank Statements

Another common scam is fake bank statements. Property managers will occasionally accept bank statements as proof of income. It shows that prospective tenants have substantial savings or accessible cash to pay for expenses in addition to or instead of consistent income.

Financial statement fraud comes in many forms, like overstating revenue and assets or understating liabilities. It usually involves modified bank statements with a combination of legitimate and fake tenant information.

Here are some red flags to look for when reviewing bank statements:

Inconsistent fonts, characters, and formatting
Low-resolution or inaccurate bank logos
Mismatched balances between statements
Suspicious deposits or withdrawals

Fake Employer References

Traditionally, references have been a reliable way to verify employer information and gain valuable information about applicants. References give you qualitative information about a tenant—not just numbers. They’re also commonly used to clarify income verification discrepancies.

You contact the tenant’s employer to verify their employment status, income, and reliability by asking a series of questions. But now, scammers frequently provide fake employer information—connecting you to illegitimate sources.

These fake employers could be companies hired to commit fraud on the applicant’s behalf or personal connections of the future renter who provide false employment verification. Whoever they are, they’re not the prospective tenant’s employer.

How can you tell? Watch out for:

Unverifiable contact information
Email addresses that lack company branding
Vague responses to your screening questions

If an employer reference is real, the tenant should be able to give you verifiable proof, like a company-owned email address or phone number or the reference’s LinkedIn profile. If they’re unwilling to share this information, they might be trying to scam you.

Falsified Letters of Employment

Some applicants submit fake letters of employment—documents that include fictitious details about their job title, salary, and length of employment.

In some cases, they also include made-up companies backed by realistic details, like a phony contact number, company website, or company logo.

When reviewing employment letters, fact-check all key information for legitimacy. It can be difficult to spot fake letters of employment, but here are some signs to be weary of:

Inconsistencies in the letter’s tone, formatting, or content
Unverifiable contact or company information
Lack of a branded letterhead

Misrepresentation of Self-Employment

As the gig economy booms, many people are becoming self-employed—either full-time or as a side hustle. Unlike traditionally employed renters who receive pay stubs, self-employed workers tend to have variable income streams coming from multiple sources.

This variability doesn’t indicate whether a tenant will be good or bad, but it does make verifying their income and assessing their financial stability more challenging. Even if they earn a steady income, self-employed proof of income can be complex and disjointed.

Scammers know this and may exploit tenant screening processes by pretending they’re self-employed, providing fake business websites or tax returns to dupe property managers.

You can verify a tenant’s self-employment status and income by:

Confirming their business registration and tax IDs
Asking for client contracts or invoices
Reviewing documents for consistent information, fonts, and formatting
Checking for suspicious blank spaces, erasures, or edits

Fake Third-Party Verification Services

One of the more sophisticated employment verification scams is the use of fake third-party verification services. These scam services look legitimate but provide false verifications such as fake background checks, proof of income, and credit checks.

Without the right resources, it’s nearly impossible to distinguish a fake third-party verification service from a real one. These schemes can be extremely advanced—providing fake employment verification complete with job duties, past work experience, and even fake employer listings in reputable online directories.

Confirm a third-party service is legitimate and reputable by:

Researching their reputation
Assessing their credentials and track record
Asking for references
Reviewing their contracts and agreements

How to Spot Employment Verification Scams

Many employment verification scams follow similar patterns—you just need to know what to look for. Here’s how to protect yourself from fraud throughout the income verification process.

1. Check for Inconsistencies

First and foremost, you should review all financial and employment documents the applicant provides. Look for mismatched details, like inconsistent:

Names
Dates
Salaries
Bank statements
Formatting
Company logos

Cross-check all information across documents to confirm they’re complete and accurate. Someone creating fake documents may miss these small details, so it’s crucial to be diligent in your review.

2. Verify Employer Contact Information

Next, verify the employer’s contact information. Start by confirming their legitimacy through official channels, like their company website, LinkedIn, and social channels.

Do the contact details listed on the website match what the applicant gave you? Is there a phone number listed that you can call to verify their employment status?

Avoid relying solely on the applicant-provided contact details—they might be fabricated or connect you with an illegitimate source. Once you’ve successfully contacted the employer, ask them questions to verify the tenant’s financial stability. They might be fake employers if they provide vague responses or are hesitant to answer.

3. Use Technology to Detect Fraud

Manually verifying employment can be time-consuming and frustrating—especially when you have dozens of applicants to screen and multiple properties to fill. But with advanced technology, you can spot employment verification scams in mere minutes.

Fraud detection tools rapidly analyze a future tenant’s proof of income, flagging anomalies and ensuring document authenticity. They can spot even the tiniest of details that aren’t visible to the naked eye.

Using automated verification services like Snappt boasts countless benefits:

Save hours of manually verifying employment information

Confirm proof of income almost instantly for swift decision-making

Minimize errors and ensure document authenticity with multi-layer fraud detection

Stay legally compliant with built-in security protocols, like encryption and secure data storage

4. Look for Unusual Applicant Behavior

Lastly, pay attention to the applicant’s behavior. If they’re hesitant to provide certain documents or refuse to comply with your tenant screening process, it’s a red flag.

Unusual behavior might include:

Over-explaining employment history
Getting defensive when asked for more information
Refusing to provide references or employer contact information

Most suspicious behavior is easier to detect when you’re face-to-face with a tenant—but roughly 59% of rental applications are submitted online. This digitization makes it easier for renters to commit fraud and harder for you to identify unusual behaviors, so avoid relying on this approach alone.

Steps to Prevent Employment Verification Scams

As employment verification scams become the industry norm, you’ll need to do everything you can to protect yourself and avoid becoming a victim. We’ve outlined a few steps you can take.

Educate Your Team

The first—and arguably most important—step you should take is training your team on identifying scams, employment verification best practices, and how to spot fraudulent documents.

Educating staff strengthens your ability to authenticate documents quickly and ensure fraudsters don’t slip through the cracks. You can train staff by:

Making them aware of top employment verification scams
Sharing case studies of past scams for awareness
Providing them with legitimate document examples for comparison

Establish a Robust Screening Process

Safeguarding your business from fraud attempts starts with implementing a robust tenant screening process into your application workflow. This will help you find good tenants and confirm they’re legitimate people with a reliable income, positive credit and rental history, and verifiable background.

Screen tenants by using a combination of:

Manual document review, cross-checking information for consistency

Direct verification, such as contacting employers

Automated tools for fast, accurate verification

Before screening tenants, set clear expectations with applicants upfront about the information you’ll collect, your screening process, and how you’ll use the information.

Leverage Third-Party Verification Services

The fastest and most secure way to prevent employment verification scams is to leverage third-party tools like Snappt.

You can partner with trusted services to automate and secure the employment verification process from start to finish—making it easy for applicants to upload and quickly verify their information.

Third-party services do more than speed up and secure the fraud detection process—they can also help reduce potential bad debt and evictions by 51%.

But not all fraud detection services are created equal. As a best practice, you should regularly audit your third-party service for compliance, reliability, and effectiveness.

Stay Up-to-Date on New Scams

Protect your business by staying informed about the latest employment verification scams. With advancements in technology and the rise of AI, fraud techniques will continue to become more sophisticated and harder to detect.

You can stay up-to-date on renter scams by:

Paying attention to the latest fraud techniques
Networking with other property managers to share insights
Reading Snappt’s monthly blog posts and industry news

What to Do if You Suspect a Scam

You’ve taken preventative measures to protect your business, screening tenants and verifying their income. But what should you do if you suspect you’ve encountered a scam?

Avoid panicking or making immediate accusations. Follow the appropriate documentation and take swift action to protect your properties and legal interests.

Here’s what to do if you suspect a scam:

1. Notify the applicant. Tell the prospective tenant about discrepancies and politely ask for an explanation or additional documents. If they’re unable or unwilling to do so, it’s likely a scam.

2. Keep a detailed record of all communications, documents, and interactions.

3. Consult with legal counsel to ensure you follow the right steps to remain compliant and protect your business from hefty fines or legal implications. Then, gather any evidence that supports your belief the applicant’s employment data is fake.

4. Report fraudulent activity to local authorities, bureaus, or industry associations.

5. Alert federal agencies, like the Federal Trade Commission (FTC), Identity Theft Resource Center (ITRC), or Federal Bureau of Investigation (FBI).

Avoid Scams With Employment Verification Technology

As the economy continues to recover from the impacts of COVID-19, it’s natural for some tenants to have employment gaps, occasional missed payments, or lower credit scores.

What matters most is that they’re honest—employment verification confirms their information is genuine while safeguarding your property from potential financial and legal risks.

Staying vigilant and informed about common scams is essential. Robust screening practices are no longer optional—they’re crucial. By proactively investing in reliable verification tools, you can identify and prevent tenant fraud before it becomes a problem.

Don’t wait until you encounter employment verification scams to take action—strengthen your tenant screening process today with an automated income verification tool that protects your business, saves time, and provides peace of mind.