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You are reading: How to Identify Fake Bank Statements

April 22, 2024

How to Identify Fake Bank Statements

Daniel Berlind
CEO

Let’s face it: in today’s world of advanced technology and savvy scammers, creating a fake bank statement is easier than ever. Whether you’re a property manager screening prospective tenants or an employer verifying an applicant’s income, it can be tough to know for certain whether a bank statement is the real deal or a clever forgery.

Instructions on creating a fake bank statement are readily available via web tutorials and step-by-step YouTube videos. Some companies even offer these services and provide falsified documents for a small fee.

In 2018, the Federal Trade Commission filed three separate cases alleging that three people and their companies sold customers fake pay stubs, bank statements, and other financial documents. These companies weren’t subtle on their websites, using proclamations like “Quality Authentic Fake Forms! Proven to Work!”

People often use fake bank stubs to misrepresent their finances on residential rental applications. Before agreeing to permanently shut down their businesses as part of a settlement with the FTC, the companies sold fake documents for between $20 and $150 each. One operator ran another website called iVerifyMe.com, selling job verification services that would “confirm to anyone who asks” the customer’s hire date and hourly wage.

“The sale of fake documents makes it easy for identity thefts and scammers to ply their trade,” said Andrew Smith, Director of the FTC’s Bureau of Consumer Protection, in the press release. “This action demonstrates the FTC’s determination to stop those who help people to commit identity theft and fraud.”

How to Identify Fake Bank Statements on Fraudulent Rental Applications

Unfortunately, the problem of rental applicants providing fake bank stubs hasn’t gone away in the years since those settled cases. It’s only worsened during the pandemic, according to Snappt’s “2020 Effects of the COVID-19 Pandemic on Residential Rentals Survey.” The percentage of fraudulently altered applications has increased from 15% before the pandemic to 29% in September 2020. One in 10 fraudulent applications used to go undetected. Now, it’s one in four.

That increase in undetected fraudulent applications can partly be attributed to the difficulty in detecting fraud when documents are submitted via online applications. That’s become more common during the pandemic. While not infallible, knowing what to look for can help property managers better spot fake bank statements and help avoid evictions, which can cost as much as $7,500 per case. Here are three strategies to identify them.

Look for Inconsistencies

The first potential red flag involves the bank statement’s appearance. Are the font type and size consistent with what’s on other bank documents? Do decimals and other elements on the statement line up correctly? Is the bank logo on the statement of low resolution different from the logo on the bank’s website? Someone creating fake bank statements may get lazy or sloppy with any of these details.

Next, look at financial inconsistencies. Does the math make sense? Does the ending balance on one bank statement match the beginning balance of the following statement? Is there an excess of funds but also an excess of overdraft fees? Are there withdrawals that look suspicious? Any of these could mean more research is needed.

Make Sure the Numbers Check Out

Once you have the applicant’s bank statements from the previous 30 to 90 days, compare the amount and employer on their direct deposits with the details on their bank stubs. If they deposit their paychecks themselves, compare their take-home pay with their check deposits. When considering their current rent, the amount on their bank statement should be consistent with the rent they listed in their rental application.

“You may find in the next year that more applicants have employment gaps, missed payments, or lower credit,” writes the American Apartment Owners Association. “What’s most important is to find applicants who are honest with you. Accurate information and data can help you be more comfortable renting during this uncertain time.”

To further assess an applicant’s ability to pay rent, look at the frequency of their direct deposits. It’s a good sign if they have regular deposits from the same employer every two weeks or once a month. Additionally, consider what their average amount is over time. If it fluctuates significantly from month to month, you may want to ask for an explanation.

Lastly, people who create fake bank statements will often use round numbers. Whether we’re talking about a paycheck amount or a rent payment, a rounded number is unlikely. A bank statement containing multiple rounded numbers could indicate something fishy.

Speak to a Bank Representative

Consider contacting a bank representative if you’re uncertain whether you’ve received a fake statement. Call the bank – using a number you’ve obtained and not the one written on the application – and ask a representative to confirm the details in the bank statement supplied by the applicant.

If the representative isn’t comfortable supplying that information, you can email the document to them and ask for confirmation that the bank issued the bank statement. Unfortunately, you may not get much support from the bank. While some banks try to prevent the manipulation of documents by applying security features to PDF files, these measures are typically centered around protecting investment accounts.

Even when used with bank statements, they are not infallible to a determined fraudster because “inevitably, all PDF files are editable,” writes Peter Davis, CPA, in the article “Fraudulent Manipulation of Bank Statements in Electronic Format.”

“Changes made to bank statements are virtually impossible to identify without having a copy of the original bank statement to compare them to,” he cautions.

Detect Fake Bank Stubs With Snappt

Fraudsters are getting more crafty by creating fake bank stubs that dodge traditional inspection tactics. But no need to stress; Snappt is here to save the day! Our fraud detection software uses AI-powered image analysis to weed out counterfeit documents in rental applications. And the best part? You’ll have the results certified within 24 hours.

By implementing our technology, property managers can spot these fraudulent financial documents that slip by other tenant screening tools. This can save time that would otherwise require people to study documents and saves your team unnecessary headaches. Even better, it’s known to decrease evictions and bad debt by 51%. Sound good? Contact us for a free demo, or visit our website to learn more.

To Sum Up…

Spotting a fake bank statement may seem daunting initially, but with the right tools and know-how, it’s easier than you might think. By closely examining the document for inconsistencies, verifying the information with the bank, and using tools like Snappt to detect fraudulent activity, you can protect yourself from scammers trying to pull a fast one.

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