Common Ways Applicants Fake Proof of Income

Do you know how to decipher a fake pay stub? Unfortunately, a growing number of companies and individuals prey on people who need pay stubs for rental applications. In many cases, these scammers create a fake pay stub for a fee – and many of these documents are pretty accurate-looking.

As a landlord or property manager, one of the most critical steps in the tenant screening process is verifying proof of income. Ensuring an applicant has a stable, sufficient income is vital to protect your rental property and guarantee that rent payments are made on time.

However, some applicants may fake their income documents to secure a lease. This article highlights common methods renters use to fake proof of income and provides valuable tips on detecting these deceptive scams.

Common Ways Applicants Try to Fake Proof of Income

While most people are honest, there are ruthless renters out there who try to trick landlords and property managers with fake proof of income, and this trend is only increasing. To avoid getting duped, here are some common ways potential tenants try to fake proof of income:

Edited Pay Stubs. One of the most popular ways prospective renters fake proof of income is by using editing software (think Photoshop or Canva) to alter existing pay stubs. They may tweak the income amount and employer details or even craft an entirely fake pay stub from scratch. The skill level and sophistication of these imitations can vary, with some being evident immediately and others nearly impossible to tell apart from authentic pay stubs.

Fake Employment Letters and Employers. Some applicants might generate a phony employment letter that seems to be from a legitimate employer. These letters tend to include made-up details like job title, salary, and length of employment. In some scenarios, a potential tenant may even list a contact number for the presumed employer, which ends up, in fact, being a “friend” agreeing to confirm the fake information. Also, be on the lookout for fake employers. Applicants might include contact information for a fake company or a friend pretending to be an employer.

Fraudulent Bank Statements. Bank statements are another way applicants try to deceive property managers. They may use digital tools to rework transaction histories, deposit amounts or even account balances to make it appear that they have a higher income or more sizeable savings than they really do. This strategy can be especially believable as it involves various layers of data.

Forged Tax Returns. While this tactic is less common due to its intricacy, some applicants may submit forged tax returns. This trick involves considerable effort because it requires designing or editing official-looking documents that mirror the format of authentic IRS filings.

Inception Fraud. Inception fraud occurs when legitimate pay stubs are used for fraudulent purposes. A legitimate company or LLC creates “legitimate” pay stubs for an individual with their requested amount. Because these pay stubs are created using recognized payroll providers and by a real company, existing fraud detection methods will rule these documents as “clean” or “unedited.” Currently, Snappt is the only fraud detection provider able to catch this type of fraud, thanks to its Fraud Forensics team.

How to Spot Fake Income Documents and Keep Your Property Protected

Knowing how to spot fake income documents can save you from a lot of headaches and hassle in the future, as well as keep your property protected.

Here are six ways to spot fake documents:

1. Inspect all documents provided by the applicant carefully. Look for inconsistencies in formatting, font styles, and sizes. Legitimate pay stubs and tax returns are usually uniform – fakes might contain subtle differences. Pay close attention to details like company logos, which might appear blurry or grainy if altered or copied and pasted.

2. Always verify employment details by contacting the employer directly. Use official contact information found via your own research rather than depending on the contact details provided by the potential renter. When talking with the employer, confirm key details like the applicant’s job title, employment duration and salary. Be suspicious if they seem hesitant or reluctant to provide information – this is often a red flag.

3. Cross-check the information provided in pay stubs, employment letters and bank statements. Look for consistency in names, dates and amounts. Variations between these documents can be a sign of possible fraud. For instance, if the salary amount on the pay stub does not mirror the deposits shown on the bank statement, you should consider digging deeper for additional information.

4. Use third-party income verification services. These services can provide an extra layer of security by verifying the authenticity of income documents and employment details. Many services have access to databases and financial information that can immediately confirm or deny whether the documents are legitimate.

5. Request additional documentation. If you are concerned about the documents’ validity, ask the prospective tenant to share additional documents, like recent tax returns, bank statements, or other proof of income. Honest people will be willing to provide these documents, whereas those trying to commit fraud may hesitate or pass along more fake documents.

6. Utilize income verification technology. Take advantage of the wide range of online verification tools and resources. The IRS provides an online tool to verify tax transcripts, and some fraud detection and property management services offer verification services for employment and income information. In the fall of 2024, Snappt will be launching its own income verification services as part of its Applicant Fraud Detection and Income Verification Suite.

Avoid Fake Income Documents

Confirming proof of income is an essential part of the tenant screening process. This is why landlords and property managers must be aware of the common methods renters often use to fake income documents.

By utilizing thorough verification techniques and leveraging available resources, you can dramatically lower the risk of accepting fake proof of income or other fraudulent documents, ensuring a trustworthy tenant-landlord relationship.

Stay vigilant and methodical in your approach, and remember that a little extra effort during the screening process can save you from considerable trouble down the line. Ensuring that your tenants have genuine and sufficient income will help maintain the financial stability of your rental property and foster a successful landlord-tenant relationship.

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