Fraudulent Rental Applications Surging Across the United States, Tenants Faking Details to Secure Luxury Apartments

According to a survey by the National Multifamily Housing Council (NMHC) in the United States, fraudulent rental applications and payments increased by 40% compared to 2023. Atlanta has emerged as the epicenter of escalating rental application fraud across the United States, with similar trends observed in South Florida, Washington D.C., and Houston.

In Atlanta, a real estate development boom has led to an oversupply of high-end apartments. Some property managers have mentioned that leasing agents are eager to fill vacant units, leading to looser background checks for applicants. This has resulted in a growing number of tenants resorting to fraudulent means to secure luxury apartments.

In the United States, applying for high-end apartments typically requires a stable high income, good credit, a positive leasing history, the ability to afford high rent, proof of income or employment, adherence to property management regulations, and legal residency status.

Greystar, the largest apartment landlord company in the country, stated that as many as half of rental applications at certain properties in Atlanta involve fraud. Other landlords have also noticed a rapid increase in tenants falsifying income or personal information.

An article in The Wall Street Journal on October 21st reported that on social media, especially TikTok, numerous “influencers” claim that there are plenty of empty luxury apartments in Atlanta and teach tenants how to “alter” financial information to improve approval chances.

There are even influencers on TikTok selling a leasing “document kit” for $1,250, providing a complete set of application materials, including forged credit scores, falsified financial proofs, social security numbers, and fictitious employment verifications for tenants to deceive landlords.

Property manager Kori Sewell from Buckhead area warned, “Eight or nine out of ten tenants who claim they want to move in today or tomorrow are likely to be fraudsters.”

Experts caution that using fake Credit Profile Numbers (CPNs) or falsified documents constitutes criminal fraud. Former Atlanta judge Louis Levenson emphasized that using such false information in rental applications is a criminal offense.

Despite this, most landlords are reluctant to press charges because such tenants often lack the means to compensate. Landlords are more concerned with evicting them quickly and re-renting the unit. Eviction records stay on a tenant’s housing history, making it harder for them to secure rentals in the future.

Many landlords have reported financial losses due to fraud. Some tenants stop paying rent after moving in, leading to increased bad debts. Moreover, fraudulent applications result in inflated rents – as landlords mistakenly believe there is high demand for expensive units. Neighbors also report that these “fraudulent tenants” often engage in other illegal activities or vandalize the property before being evicted.

Many landlords have started using anti-fraud detection software to screen rental applications. However, Kyle Nelson, Vice President of Corporate Strategy at Snappt, an anti-fraud platform for rentals, pointed out that fraudsters constantly exploit AI technology to deceive, necessitating regular software updates for effective protection.

Nelson emphasized the need for anti-fraud software to keep pace with evolving methods, adopting a “fight fire with fire” approach to combat fraud effectively.

(Adapted from The Wall Street Journal)