Billy Bad Tenant wanted to move so he wouldn’t have to sleep on his friend’s couch anymore. Besides, his friend had gotten tired enough of Billy that he kept suggesting that Billy find a new place to crash. His reputation preceded him with two evictions and more bad debts than he could count or care about, so with that history, he was out of luck with almost all rentals. He needed help if he was going to worm his way into another rental. Feeling flush, Billy had won some money gambling (usually he lost, hence his inability to pay the rent) so he had more than enough cash to rent a new place. But he knew his chances were slim to none of finding anything with his rental history.
At wits’ end, he was looking through TikTok one day and saw a video advertising “Need a New Identity? Want to Start Over? Results Guaranteed.” He clicked on it. The ad came from a fraud company calling itself XYZ Co. LLC. They were happy to “help,” they said, and could fix him right up. They created a complete new identity for him that they claimed would fool even the most suspicious rental owner. Billy sent XYZ the amount of money he wanted to “earn” adding the company’s fees.
Yes, they really do exist, these companies in the business of creating new identities, and they don’t care for what purpose as long as they get paid. They have become one of the latest thorns in the side of rental owners and managers screening their applicants.
Billy Bad Tenant became William Ideal Tenant, a whole new person, it seemed. On his rental application, William wrote he had a job at XYZ Company LLC that paid him in excess of $100,000 a year. The genuine-appearing paystubs confirmed it as did the employment letter.
Since the XYZ already was a real LLC, it could create a “real” pay stub for William along with a matching bank statement. Now he had “proof” that he earned $100,000.
When the rental owner called XYZ Company from the number on its website, they confirmed that William did in fact work there and had for several years.
XYZ also created a rental history that the rental owner could kinda, sorta confirm, if he wasn’t too suspicious. At least the previous landlords seemed to exist, even if they weren’t the actual owners of the rental properties where William claimed to have lived. They gave William glowing references.
To create the new identity, the XYZ Company created a synthetic identity for William, how that works in a minute. That included a credit report using William’s name but another person’s Social Security Number. They had hacked the number from 90-year-old Willie Winston who hadn’t used it for several years.
Fraud has increased to the point where, according to Transunion, 95 percent of property owners and management companies experience difficulty preventing fraud. Bad tenants get more and more clever using phony documents and references to get past even the most careful screening processes. A National Multihousing Council (NMHC) survey reports that more than 70 percent of apartment owners and managers “have experienced fraudulent identification documents or misuse of another individual’s personal information, and this number continues to rise as creating these fake identities gets easier.”
Bad Tenants ask themselves daily what they can do to get rental owners to think they are qualified to rent. Where can they mislead screening so it misses their real rental history?
William Ideal Tenant (aka Billy Bad Tenant) might have done it himself but didn’t have the computer skills required, so he paid the XYZ Company to do it for him. He wasn’t good at details, anyway. So even if he did have the computer skills, he likely wouldn’t have done a job that could fool even the most lax property manager. One thing people look for in suspicious documents is what just don’t look right, such as different fonts or even different-sized fonts on W2s.
Fraudsters use three different methods in creating rental fraud, reports Transunion.
First-party fraud amounts to “using another person’s identity with their knowledge and/or permission. . . they’ll use a friend’s identity who has high wages and a stellar rental history.”
Third-party fraud involves “stealing an identity from an unsuspecting victim without their permission. Third-party fraudsters present legitimate bank statements and wage documents using identities stolen from victims,” partly what the XYZ Company did for Billy Bad Tenant using the 90-year-old’s Social Security Number.
Third is synthetic identity: “stealing more than one [identity to] create a new one, . . fabricate an identity using a mix of stolen identities using data from multiple individuals,” also what XYZ Company did.
William/Billy didn’t get away with it. Here’s why. The rental owner spotted red flags and couldn’t confirm much of anything on the application. The most obvious red flag was the driver’s license. Yes, those can be created with a synthetic identity, as can passports and other government documents, a federal crime. But that would have been more expensive than Billy could have afforded. Is the name of the driver’s license the same as the “applicant’s”? What about the address? Does it match any of the addresses on the application? If not, why not?
What about the addresses on the credit report? Do any of them match the application addresses? If not, the explanation had better be good.
What about the Social Search? Does the demographic information match the applicant’s? In this case, the Social Security Number of the phony name came back with a 90-year-old’s information. Just looking at 20-something-year-old Billy cast reasonable doubt about the truth of everything Billy had written on the application.
So many rental applications are done online now, and screeners, the lazy ones anyway, might rely without question on the fake documents the applicant provides. Every applicant must be verified in person with proper ID.
Nothing replaces verifying everything, meeting the applicant in person, and looking for anomalies in the information on the application. If we rely solely on technology, we are asking to become the victim of rental fraud.
