How to Avoid Tenant Screening Scams
While we might like to believe that people are generally honest, that is not always the case. People will come to you wanting to rent your unit and may try to scam you. Seasoned landlords have a sense about when they might be getting scammed, but property owners and investors who might be new to the industry don't necessarily know all the ways people may try to scam them. Here are a few of the ways.
The Fake Credit Report
It can seem like a nice idea, the tenant brings their application, a nice packet of supporting paperwork, and a copy of their credit report. You just saved yourself the time, effort and money, right? Not so fast. In this day and age, faking those forms is all too easy. People can use programs like Photoshop or documents from a Google search to create a much better credit report. It takes little effort on their part and soon you could find yourself with a tenant who cannot pay rent and you now have to start the eviction process.
The best way to mitigate this is to always use RHAWA's Tenant Screening services. If you use the RHAWA’s Application for Tenancy form, you can collect all the necessary information and screen the application quickly by emailing or using the OnTap online resource.
Fake Proof of Residence and Employment
Anything can be bought and sold, and when we say anything, we mean anything, including fake W-2s and pay stubs! It's not even technically illegal, but people can buy those documents and use them to scam landlords. The tenant risks arrest if they use them, but one of the advantages of this type of fleecing is that their real name is hidden to you so even if you report them to the police the name you have is most likely not their actual name. Even references can be faked. You can call up the landlord reference and either they will know nothing or the number could go to a friend that is in on the scam and the lies pile up even higher.
The best thing to do is use your online resources . Start searching for their place of employment. Does it exist? Call the general line and go through the phone system until you find their boss or supervisor. Curious about their last place? Stop by if it is near you or just call the general line listed on Google. If it's a scam, a simple Google search will cut right through their lies.
All Cash Deal
In buying and selling property, someone offering an all cash deal is a dream come true. However, there are more protections in a sale. In rental housing, someone coming along with cash up-front and offering to move in right away is suspicious. RHAWA recommends that you screen all tenants the same (it's required in Seattle) and that no one, no matter their financial situation, should cut the line (it's against the First in Time rule in Seattle). Besides, people like that could be criminal, con-artists, or otherwise suspicious. Do your screening and get income verification and criminal background check and screen all your applicants by your criteria.
This scam also includes those check-writing scams. They aren't as common, but often people will send you a check by mail and it will be over by some amount and they will ask you to take the money and either keep it and put it toward rent or just return it to them. In this scam, the check is bad and by the time you've given the money back to them, the check has bounced and you are on the hook for the whole amount. Most people are savvy enough to see through this one, but scammers might try it anyway. Be on the look-out.
6 Month's Advance Sublet
This one is rather unique, and it leaves both you and your tenant out in the cold. You'll be advertising the property and find the seemingly perfect tenant and get them all moved in. The first month's rent will come in with no problems, but the 2nd or 3rd will be late. You'll head over to see where your rent is and encounter someone, not your original tenant, living there. They'll have no idea who you are or why you're looking for money. They will of course tell you that they already paid the landlord and ask who you are! Of course, once you both have realized what has happened, you have trouble, because the person that you rented to will have gotten the keys, advertised the vacancy, moved this other person in with a 6-month upfront requirement and walked with the cash. You'll have a new, unscreened, desperate tenant who can't pay rent again because they've already paid out hundreds or thousands of dollars in rent.
The only way to protect against this is to be on the look-out for scammers from the beginning. Every detail is important. It's also helpful to Google your property from time to time and see if it's being advertised anywhere you didn't put an ad.
The big lesson here is that just because someone seems like they are the perfect, heaven-sent tenant doesn't mean that they are any of those things. Put in the time and effort to screen someone every time and you'll reduce your chances of getting scammed.