Checkr: Rental Fraud Poses Big Concern

(Image courtesy of Sora Shimazaki/pexels.com)

Checkr, San Francisco, released a survey of landlords and property managers, finding that 82% are worried about fraud in their tenant applications.

Two-thirds have run into a fraudulent application, and 67% of respondents say fraud has gotten harder to detect than it was a year ago. A third estimate that up to 25% of the applications they reviewed last year had some falsified information.

In terms of where fraud is appearing, 37% said fake or altered pay stubs or bank statements were their biggest concern, followed by concealed criminal or eviction history at 24%. Third is a fake identity, at 19%.

These kinds of fraud have real effects down the line–48% of landlords and property managers have evicted a tenant after uncovering fraud in the application process. Forty-two percent report that they discovered the person who moved into the unit was not the person who applied and got approved, and 65% discovered an approved applicant concealed a criminal record or eviction history.

Landlords and property managers are attempting to avoid these types of fraud, with 73% reporting running criminal background checks, 65% using a dedicated identity verification service and 64% pulling credit reports. More than one-third–37%–spend between $100-$199 on tools just to place a tenant, and 76% said they are at least somewhat concerned about compliance risk in their screening process. Forty-six percent report having lost at least $5,000 to a fraudulent or bad-fit tenant.

By metro area, Phoenix sees the highest percentage of landlords reporting having seen one or more fraudulent applications in the past five years, at 72%, followed by Seattle, at 70%. Los Angeles, Denver, Orlando, Fla., Indianapolis and Charlotte, N.C., all are tied at 68%.