How to protect your rental from modern fraud tactics

Fraud isn’t breaking in through the back door anymore—it’s walking right through the front, armed with a polished application and a picture-perfect pay stub.

In today’s rental market, the biggest threats don’t always come from economic downturns or maintenance emergencies. Increasingly, they come from fraudulent applicants who look great on paper, check all the boxes, and still manage to cost you thousands in unpaid rent, damaged units, and legal fees.

Leasing teams are now up against a new generation of scams—smarter, faster, and powered by tools anyone can find online. From AI-generated income docs to fraud-for-hire services, even the most experienced operators are being tested.

So, how do you protect your properties and your rent roll when the line between qualified and questionable gets harder to see?

A perfect storm: why fraud is spiking now

Several overlapping trends have created the ideal environment for rental fraud to grow:

• Touchless leasing processes (thanks to COVID-19) mean fewer face-to-face interactions and more reliance on digital screening.
• Eviction moratoriums and backlog delays have emboldened bad actors who know it may take months to remove them.
• Social media platforms like TikTok and Instagram are full of tutorials showing exactly how to fake income documents or “borrow” someone else’s identity to qualify for an apartment.
• The rise of gig work and non-traditional income has made it harder for leasing teams to distinguish between real financial complexity and actual fraud.

And with staff stretched thin and rent growth under pressure, many operators don’t have the bandwidth to manually detect fraud on every application—especially when it’s subtle, well-produced, and shows up in volume.

What does today’s fraud look like

Here are some of the most common (and hardest-to-detect) tactics being used in the market right now:

1. Identity mismatch fraud
An applicant applies using someone else’s name, Social Security number, or previous address—often someone with better credit. Because some information matches and the rest looks clean, these applications often pass first-round checks.

2. AI-generated income verification
Fraudsters use document generators or AI tools to produce convincing pay stubs, bank statements, and employment letters. In many cases, the company is real—but the role, salary, or tenure is completely fabricated.

3. “Fraud-for-hire” services
Entire businesses exist online offering fake references, fake HR contacts, and even spoofed phone lines for landlord calls. For a fee, someone can submit a fully polished rental application with fake employer and landlord info—and provide "live" phone verifications.

4. Lease fraud and subletting scams
A resident leases a unit under false pretenses, only to turn around and sublease it illegally or list it on short-term rental sites. This is especially common in buildings with loose guest or subletting policies.

5. Organized application rings
Some fraud rings apply to multiple properties at once, hoping one leasing team is overwhelmed or under-trained. Once they’re in, they often default quickly, causing losses across several buildings in the same submarket.

Why it matters: real stories, real impact

This isn’t just hypothetical. Operators are seeing real losses tied directly to fraud. One property manager shared how an applicant passed through three layers of checks—only to later discover all documents were fake. The resident never paid rent, held the unit for 3 months, and left behind $7,000 in damage.

Another operator reported two violent incidents in the same year, both involving residents who had moved in using fraudulent identities.

Even when there’s no criminal activity, fraud still hurts everyone:

• Honest renters pay the price through increased rents
• Leasing teams spend time chasing ghost residents
• Owners lose revenue, pay legal fees, and deal with higher turnover costs
  
  

How can operators fight back

Fraud will always evolve—but so can your defenses. Here’s how leading property managers are adapting:

1. Leverage identity verification tools

Facial recognition, video ID checks, and third-party verification tools can help confirm that the person applying is who they say they are. Even a simple selfie-matching check can stop dozens of impersonation attempts.

2. Use smart document analysis tools

Platforms like Snappt automatically flag altered pay stubs, mismatched fonts, and suspicious metadata in PDFs. This takes the pressure off your team to manually analyze every file.

3. Update your screening criteria for modern income

Freelancers, creators, and gig workers may not have a traditional W-2. That doesn’t mean they’re unqualified—it just means your screening approach needs to go deeper. Look for systems that consider banking history, tax returns, or cash flow patterns, not just job titles and credit scores.

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4. Train your team on red flags

• Applicants who pressure your team to move fast
• Inconsistencies between credit data and application
• "Too good to be true" documents or extremely clean histories
• Multiple applicants linked to the same references or phone numbers
  
  

Regularly update your training based on real fraud attempts your team encounters—and share across properties to stay ahead of new tactics.

What if fraud still gets through

No system is perfect—and some of the most sophisticated fraudsters will still make it through. That’s where financial protection tools like Cosign come into play.

Cosign isn’t a fraud detection system. It’s a risk transfer solution that helps protect your income when a resident defaults or skips. It’s not about stopping the fraud—it's about cushioning the financial blow when your defenses miss something.

Here’s how it works:

1. A resident who doesn’t meet your income or credit standard is referred to Cosign.
   Cosign underwrites the applicant using alternative data.
2. If approved, they purchase coverage—at no cost to you.
3. If the renter defaults or skips, Cosign pays your rent claim within 5 business days.

Whether fraud was involved or not, you still get paid.

Cosign as part of your fraud response strategy

By integrating Cosign into your leasing process, especially for edge-case applicants, you create a buffer that protects your rent roll even when mistakes are made.

Let’s say 20% of your denials are actually solid renters with unconventional profiles, and 5% are bad actors trying to slip through. Cosign can help you convert the 20% safely—and reduce the damage from the 5%.

It’s not just about plugging a hole—it’s about building a more resilient leasing system that:

• Converts more leads
• Reduces bad debt
• Protects rent flow
• Doesn’t bog down your leasing team
  
  

Final thoughts: fraud will keep evolving - it’s important to do so as well

You can’t stop every fraudster. But you can make it a lot harder for them to succeed—and a lot less costly when they do.

By combining smarter screening practices with protective tools like Cosign, you’re not just protecting your property—you’re protecting your people, your revenue, and your brand.

Fraud is frustrating. Default doesn’t have to be devastating.