5 Tenant Screening Scams and How to Avoid Them

“Here are all the things you asked for!” says the tenant eagerly with a courteous smile as he hands you a neatly compiled folder of papers. As you quickly flip through the folder, everything looks in order — the rental application is completely filled out, proof of residence and employment are all there. So you take a security deposit and the first month’s rent.

You’ve been busy, so it’s a month later when you notice that the checks have bounced. You inform him of what happened, he apologizes and writes you a new one. Okay. Maybe he just forgot to put money into his account that first time. Relief washes over you as you feel reassured he’s given you a check to a working account. To your dismay, you find the checks have bounced. Again.

Now he’s withholding rent from you, complaining that the property is deplorable. You file for his eviction but the process does not go as quickly as you hoped. Someone is now living in your property for free and you’re coughing up the dough to cover the rent he should be paying while you wait for his eviction to process.

This is a complete tenant screening horror story. Of course, this is not the case with most tenants. But there are still scammers waiting to take advantage of any vulnerability in a landlord’s screening process.

That’s why proper screening and rental applications are a crucial to reduce the chances of a tenant scamming a landlord like yourself. We’ve outlined things to look out for to avoid getting scammed to help you feel confident during the tenant screening process.

What Are Examples of a Tenant Scamming a Landlord?

1. The Credit Report

Tenants will usually apply to multiple rentals and in turn, come prepared with their own credit report in order to save on the fees landlords charge for a credit check. One of the mistakes a landlord can make is simply skimming through the provided report and focusing only on the credit score.

Credit scores sometimes provide validation that a tenant will be financially responsible, but it’s crucial to understand how to interpret a tenant’s credit report. A tenant’s payment history is just as central to the report as is their credit score — payment history shows their track record of paying their credit accounts, and allows you to see if the tenant has paid on time.

It’s also a good cautionary measure to do your own credit report check. Doing so will take additional effort on your end, but Avail provides its own convenient and easy-to-access credit, background, and eviction reports so you can ensure you’re properly screening a tenant. All you have to do is create a landlord account and set up your potential tenant to begin the tenant screening process with confidence.

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2. Proof of Residence and Proof of Employment

Among the other documents in the folder were the tenant’s electric bill and pay stubs. That’s good, right? Sure, it’s a good start, but is it necessarily reliable? As with the credit report, the answer is no.

It might seem cynical to so quickly doubt the information that the tenant has provided you. But as a DIY landlord, it’s advised to source your own proof that the information a tenant provided is accurate. Once they’ve provided proof of residence and current employment, you can reach out to the point of contact they provided to ask questions on their history there.

3. Moving for a Job

Electronic or impersonal exchanges regarding your property are perhaps one of the trickier aspects of being a landlord. You might receive an email or a phone call about the property you listed, where the tenant will explain his employer is moving him to the area of your property. He may send you an “employer’s check” which is much larger than the amount you require, and ask that you return him the difference.

In this situation, there is and was no “employer’s check.” It was a fraudulent check, and by the time he cashes the check you sent him back, he will be long gone and you’ll have lost thousands of dollars. First, any overage on the amount you request should be avoided to ensure you receive the requested amount each month.

Second, any exchange or transaction that takes place solely over the phone or online is asking for trouble. An offer from a tenant who has not even seen your property is suspicious, and even if a tenant is moving from out of town, you need to meet them face-to-face. Moving from out of town should not exempt the tenant from a proper screening process.

4. First Couple Months’ Rent in Advance

After an initial exchange, you finally meet with a tenant you have been talking to. Perhaps he is very content with the property that you’ve shown him and wants to move in immediately. He offers you the first couple months’ rent in advance to really convince you that he’s committed to moving into your place. Sounds amazing, doesn’t it? After all, you’ll get a hefty sum of money up front.

In this case, an alarm should be going off in the back of your head. Consider looking at the proof of employment that your tenant provided. Are there any inconsistencies? If the amount he’s willing to pay exceeds the amount that he makes in a month, there’s obviously something wrong.

Even if the tenant’s income and the offer make sense, it’s still worth considering why the tenant is so eager to convince you to let him move in so soon.

Of course, not all such cases signify that your tenant is trying to scam you. But again, take the time to enforce a legitimate process. A landlord needs to take the time to consider the applicant, research the documents provided, and perform a background check.

5. The Tenant-Landlord

Your new tenant finally settled into your property, and you’re happy things worked out well for you both. But then the check for this month’s rent doesn’t come in. Why is rent late? You give it a day more, then you finally talk to your tenant.

When you knock at the door, someone else answers it. You assume it is your tenant’s friend and you ask for your tenant. “Who?” the stranger asks with a blank expression. You explain that you are the owner of this property, but the recipient of your explanation is completely dumbfounded. She says that she has another landlord to whom she pays rent.

So what exactly happened here? The tenant you happily moved into your property was actually a professional who scammed you. After he moved in, he posed as the landlord of your property, advertised it, and moved another group of tenants in and took the first six months’ rent in advance, all in cash. He not only took off with the tenants’ money but what could be considered your money as well.

Can the police find him? Maybe. But chances are, he gave you a false name and identity and since he took cash from the tenants living in your property now, the money can’t be traced back to him.

In 2014 alone, 17.6 million U.S. residents were victims of identity theft. Who’s to say the tenant you met with is not using someone else’s identity? This is why it’s always important to take two forms of ID. One of these should always be a photo ID — the photo is absolutely necessary because it serves to match the tenant with the person he or she says they are.

Ensuring the identity of your tenant is not only important in terms of protecting your property, but also to prevent them from further committing fraud in the case they are indeed using a stolen identity.

Properly Screen Your Tenants With Avail

Creating and sticking to a rigorous tenant screening process is key to avoid being scammed. While a rental application, proof of employment, and proof of residence are all important, one final and crucial component is identification. 

The fundamental component to tenant screening is to take time reviewing and processing any applicants for a rental property. While the majority of tenants are not out to scam you, and it may take additional time, energy, and effort to properly go through the entire screening process, it will be worth it in the end.

Learn more about the tenant screening process with our comprehensive Guide to Tenant Screening, and take advantage of our easy-to-use tools like online rental applications and credit, criminal background and eviction reports to make the screening process easier.