Lease applicant identity fraud is significantly growing, warns a new report from CoreLogic, a real estate data firm. Many apartment property managers report some form of identity-related fraud that’s costing them thousands of dollars in losses from renters.

The two most common frauds landlords report are renter applicants using fraudulent identities or misrepresenting their intentions.

The typical reasons applicants likely commit fraud are an attempt to live rent-free until evicted or to hide their true identity. Those who hide their true identity often have something in their history that makes renting a challenge, such as their immigration status, criminal history, poor credit history or lack of a job history.

Many rental-fraud applicants – except the ones desiring to live rent-free until eviction – pay their rent on time.

“They feel justified in committing fraud because they know you wouldn’t rent to them – for good reason – if you knew the truth,” the report notes. “The fact they pay rent on time, however, does not lessen the risk they present.”

The report calls out four main types of identity fraud:

  • First-person fraud (also called “muling”): The applicant (or mule) acts for another person in renting the apartment, using their identity and information. Another person – different from the listed applicant – then moves in. The applicant may be a family member or friend, or it may be a scam to rent out the apartment on their own and charge above-market fees to the person living there.
     
  • Synthetic identity fraud (fictitious identity): A scammer creates a fake identity – likely one that is taken from multiple stolen sources, often from children, elderly or deceased people – to use on a rental application. This is the fastest growing type of identity-related fraud and accounts for 85% of all identity fraud, the report notes.
     
  • Third-party fraud: A person’s identity is unknowingly stolen. Their Social Security number, date of birth or other forms of identification may be used by another person to fraudulently apply for an apartment lease in someone else’s name.
     
  • Identity manipulation fraud: A scammer slightly alters some of their information in a way that may look like a typo or spelling error. For example, a Social Security number may be off by one number or a slightly different name or an altered birth date may be noted. “The goal of identity manipulation is to confuse the system so that the application doesn’t connect to the fraudster’s true identity,” the study notes.

Source: “How Identity Fraudsters Operate and What You Can Do to Stop Them,” CoreLogic (October 2019)

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