As selling prices of homes accelerated throughout the pandemic, more and more buyers were priced out of the market and forced to become renters. Unsurprisingly, the number of new renters joined the number of renters already in the marketplace to create a demand for homes that far exceeded the supply available. And when demand exceeds supply, prices increase.

For the first time, apartment seekers were entering into bidding wars and even lining up for hours waiting for leasing offices to open. It seemed that price did not matter—whether they could afford it or not.

How lack of inventory breeds dishonesty
When rents increased beyond the amount people could pay for a home, many turned to illegal methods in order to qualify for a place to live. According to Daniel Berlind, CEO of Snappt, about
11 million fraudulent rental applications were submitted last year in the U.S. The fraud detection company also notes that one in eight financial documents had been altered out of the more than 1 million it scanned.

Additionally, between 2019 and 2021, reports of fraud, identity theft and other deceptions spiked
67% in the U.S., according to the Federal Trade Commission. In a 2020 analysis, LexisNexis found more than 30,000 fraud rings who were involved in forgery, filing false claims, identity theft, identity manipulation and fake bank checks.

Fraud, the pandemic and social distancing
Since people were encouraged to isolate themselves from others during the Covid-19
pandemic, landlords began to allow applicants to send an application online without ever
meeting face-to-face. Digital interactions became increasingly popular between landlords and
tenants, especially in urban centers where virtual communication is often preferred.

While the digital age offers many benefits, such as larger applicant pools and easier communication, it has opened the door to more fraudulent applications. It is well-documented that fraudsters found numerous ways to exploit the vulnerable. When so many Americans were laid off, unemployed or furloughed, fraud reached a high of 15% compared to 10.3% over the same period in 2019.

Transunion noticed that fraud steadily increased over the course of the pandemic and 22% of
applicants failed authentication or were identified as fiscally high risk.


What are the most common types of application fraud?
Consumer credit reporting company Experian notes that application fraud tends to fall into two categories: deception intended to improve the tenant’s perceived ability to pay rent and deception intended to hide evidence of past mismanagement of their finances.

The company also points out that “even the most basic home computer can provide ample functionality to capture and re-use digital images or to scan and edit documents. As software continues to emphasize ease of use, more and more tenants will be able to engage in this type of

People with a questionable financial history are inclined to manipulate their identities in the hope that the altered information won’t be matched to their negative history. Given digital tools such as photo editing software and document editing packages which can scan and then reproduce a fake version, misrepresentation is easier than it seems. It’s not hard for a person to doctor a paystub
or bank statement or buy counterfeit ones online. When these renters move into apartments and can’t pay, it can eventually lead to eviction.

The most common lies and misrepresentations by fraudulent applicants include:
1. Listing friends and relatives as rental references
2. Fabricating credit reports, previous addresses, paystubs or bank statements
3. Providing false income or uploading an altered photo
4. Pairing a fake Social Security number with a real address to create a fake identity to gain access
to a rental property
5. Using another person’s identity or information to qualify for a rental property by misrepresenting
who they are with someone else’s Social Security number, nam, and date of birth
6. Lying about having a pet
7. Justifying the withholding of rent by claiming the home is uninhabitable
8. Illegally subletting the unit, pocketing several month’s rent payment in advance and then

People are also using stolen identities to access apartments for more unacceptable reasons like a
criminal enterprise or financial fraud.

How can a landlord avoid application fraud?
Landlords should watch for the following red flags to protect themselves from application fraud:

  • Applicant can’t or won’t meet in person, only via Zoom
  • All documents forwarded are new or created recently, i.e., passport, driver’s license
  • Applicant has no proof of employment and refuses to provide any
  • The applicant asks to move in right away without explanation
  • They have no social media visibility or presence on publiclyaccessible websites