Rental fraud red flags and the role of lease coverage in protecting your rent roll

Rental fraud isn’t new—but it is evolving fast.

From deepfake pay stubs and identity theft to fake social media accounts and ghost co-signers, rental fraud has become more sophisticated—and more costly. For property managers, especially those handling multifamily portfolios, this trend isn’t just a nuisance. It’s a real threat to your NOI, your rent roll, and your day-to-day operations.

A recent report from Snappt found that 85% of property managers believe rental fraud is increasing, and nearly half of all denied applications had some form of document manipulation. The bigger your portfolio, the more likely you are to become a target—especially if your team processes a high volume of applications digitally.

But here’s the good news: with the right mix of smart screening practices, fraud awareness, and protective systems like Cosign’s lease coverage, you can drastically reduce your exposure.

Let’s break down what modern fraud looks like, how to spot it, and how to protect your property before damage is done.

What does rental fraud actually look like

You’ve likely seen some version of rental fraud in your leasing pipeline. But not all fraud looks the same. Here are the most common forms:

1. Income fraud:
   Applicants falsify pay stubs, employment letters, or job titles to meet income requirements. Tools like Photoshop or AI generators make this easier than ever.
2. Identity theft:
   A person uses someone else’s Social Security number, name, or identity documents to apply for a unit—often part of broader financial fraud or organized scams.
3. Application fraud:
   Catch-all term for anything that misrepresents a tenant’s qualifications—ranging from fake references to inaccurate background details.
4. No-show scams:
   Fraud rings apply in bulk across multiple properties using fake info, hoping at least one gets through. Once in, they may skip out after one month or cause serious property damage before disappearing.

Why multifamily properties are targeted

Fraudsters love scale—and leasing at scale means high volume, digital systems, and team fatigue. That’s a recipe for fraud slipping through.

Here’s why you might be vulnerable:

• Less in-person contact: Virtual tours and online apps save time but make it harder to catch inconsistencies.
• Application overload: When your team is managing 50+ applications a week, they may not spot every red flag.
• Incomplete verification systems: Not every property team is equipped with tech that verifies documents, ID, and behavior patterns in real time.
  
  

And when you miss one fraudulent applicant, you’re not just facing one month of unpaid rent. You’re looking at lost income, legal fees, turnover costs, and sometimes, a damaged unit or community.

7 red flags leasing teams should never ignore

Fraud often hides in plain sight. Train your team to look for these telltale signs:

1. The applicant is rushing the process.
   They offer to pay more upfront or pressure the team to skip steps.
2. References don’t match background checks.
   If a “previous landlord” can’t be tied to the property address, that’s a problem.
3. Income documents look too perfect.
   Stock formatting, rounded numbers, and no variation in deposits? That’s suspicious.
4. Social media doesn’t line up.
   No online footprint or a brand-new account with one photo? Time to ask more questions.
5. The applicant won’t let you run a credit report.
   Anyone insisting on providing their own report likely has something to hide.
6. Employment info can’t be verified.
   If a listed job doesn’t appear online, or the listed HR contact has a generic email domain, proceed cautiously.
7. There’s inconsistency between submitted docs.
   Dates, names, and income amounts that don’t align are often signs of tampering.

What to do when you suspect fraud

• Don’t skip steps: even if you’re short-staffed or racing against lease-up deadlines, follow your protocol.
• Verify everything: call employers and landlords. Cross-reference addresses. Use tools like Snappt or income verification services.
• Meet applicants (even briefly): a 10-minute video call can be enough to catch inconsistencies or verify ID.
• Use Cosign: sometimes a renter looks good on paper, but doesn’t meet your criteria. With Cosign, applicants can qualify through an additional underwriting process—and you get lease coverage that protects your rent roll.

How Cosign helps when fraud slips through

Let’s face it: no screening process is perfect. And today’s fraudsters are increasingly sophisticated. That’s why operators are adding an extra layer of protection—by using Cosign’s lease coverage product for applicants who don’t fully qualify through the standard process.

Here’s how it works:

1. You deny an applicant based on credit or income.
2. You refer them to Cosign via a simple link.
3. Cosign evaluates their profile using non-traditional underwriting methods.
4. If approved, they pay a one-time fee for lease coverage.
5. You lease the unit as usual—with rental income protection in place.
   
   

If the renter ever skips, defaults, or breaks their lease, Cosign pays your claim in under 5 business days.

It’s like having a safety net for your screening process—and it doesn’t cost your property anything.

Lease coverage ≠ insurance

To be clear, Cosign isn’t an insurance company. It’s a purpose-built platform that protects your income when screening isn’t enough.

Cosign is designed to solve a specific operational problem: How can I approve more renters without increasing my risk?

It works especially well for:

• Workforce housing operators dealing with high denial rates
• Properties with limited staff and high volume
• Owners who want to reduce bad debt without loosening standards
  
  

And when you combine it with your existing fraud prevention strategies, it becomes part of a much stronger risk management plan.

How Cosign helps when fraud slips through

No matter how good your screening process is, some fraud still gets through. And that’s where Cosign comes in—not to prevent fraud, but to cushion the impact when it happens.

Cosign offers lease coverage that protects your rental income when a resident stops paying, breaks their lease, or skips out early. So if a fraudulent applicant slips through your process and defaults, you’re not stuck covering the loss.

Here’s how it works:

1. A renter doesn’t meet your standard approval criteria.
2. Instead of a flat-out denial, you refer them to Cosign’s online portal.
3. If approved, the renter pays for lease coverage—at no cost to you.
4. You sign the lease as usual.
5. If they default, Cosign pays your claim within 5 business days.
   
   

Cosign doesn’t screen for fraud. But it does act as a financial buffer when fraud gets past your team—and it helps protect your rent roll even when things don’t go as planned.