Fraudulent Rental Applications On The Rise in Toronto: What Landlords Can Do About It
Over 90 out of 175 rental applications were denied over a six-month period by a Toronto property management firm for being fraudulent. The applications contained falsified pay stubs, fake credit reports, invalid ID, and more.
The problem has become endemic as rents rise and people are losing employment or have to take a step down in their careers. A Toronto realtor has also reported seeing a number of fraudulent rental applications over the past year. In 2023, this was mostly done by criminals to commit real estate fraud, but it has bled out into the general population.
As far as our own policies go, we thoroughly vet every rental application and do not accept tenants with less than stellar credit and employment records. Unfortunately, documents and identification can no longer be accepted at face value in the age of Photoshop.
What kind of scams are they pulling?
A tenant may be hiding a poor credit score, a lack of employment, or anything else that may derail a rental application. To get around this, they may simply falsify the one document in question, or they may even use a friend’s or family member’s identity to secure a lease. You now have to verify that the tenant is who they say they are and that their documents are valid.
How to verify tenant documentation
Mostly, you just have to use common sense when looking at documents, but when they pass that test there’s more to do. If letters or numbers look out of place on a document, or an employer’s phone number doesn’t match the one on their website, you may be dealing with a fraudulent document. However, with the rise of AI tools and many people now having graphic design skills, these documents can be made to look very professional.
- Verify Identification
A photocopy of a driver’s license or other photo identification is now useless, and professional copies of photo ID’s can even be made. There are a number of online services to verify identity that you can use, a quick Google search will bring them all up.
- Run your own credit check
You can no longer trust credit reports supplied by potential tenants. You have to run your own credit check. While legally they don’t have to give you their SIN, you can refuse to rent to them if they don’t.
2. Always check out and call references
While you can’t ask details of a person’s employment, such as salary, you can call their employer to verify that they work there. Keep in mind that some corporate employers may not give out this information due to not wanting to violate employee privacy, but a quick Google of your prospective tenant’s name and the company should yield a result in many cases.
3. Do a social media deep dive
A social media check will tell you quite a bit about a prospective tenant, and as long as their posts are public, it is legal. Check LinkedIn profiles for additional employment verification, do a search for average salaries for their position to make sure it falls in line with what they’ve provided, and check Facebook, Instagram and TikTok for potential criminal or other issues.
If you discover something you don’t like on the search, simply tell them the unit was rented to another tenant and thank them for their application. If you discover that the documentation offered had fake information, you can turn down their application for being fraudulent.
Verification of credit and employment is now a multiple-step process that no landlord can afford to skip, considering the backlogs at the Landlord and Tenant Board for eviction. Contact us today if you want to make sure that your new tenant is exactly who they say they are.
