Fraud on the Rise in Hard Economic Times
As the economy tightens, some applicants may begin to play fast and loose with the facts. They may feel desperate times call for desperate measures with increased foreclosures and evictions. It's extremely important not cut corners in your applicant screening during any economic downturns. Application fraud is likely to be uncovered, if you stay the course of being selective and more diligent in your screening process.
Do not assume that application fraud is only perpetrated by young, inexperienced applicants trying to pull the wool over your eyes. Setup landlord and employment references are on the rise as well.
Verify all phone numbers for rental history and employment verification with the phone book or online yellow pages. We recommend that you verify property ownership for all rental history related to your applicant. You will find this information in our eviction report, or with the local tax assessor office.
Address History Report reduces fraud and much more...
The On Target Address History report can uncover rental history fraud. This is also a great tool when reviewing possible evictions.
Please click here to learn more and to see a sample report.
Please visit us online http://www.ontargetscreening.com/
If you have any questions please reply to this email or call our office at 317-423-0470
Sunday, July 26, 2009
Wednesday, July 1, 2009
Why Bother Screening Rental Applicants?
With bankruptcies and foreclosure activity at record numbers and rental occupancy rates the lowest in years, finding qualified tenants to fill rental units has become increasing difficult.
Tenant screening is one of those expenses that will more than pay for itself. It’s important to remember that tenant screening can make a difference between success and failure. Your success is dependent upon the rent being paid on time. If rent is paid late or at all, what happens is you must cover your expenses like maintenance and mortgage payments. The average eviction is around $1,500.00 and it can take a year or more to get past the loss. Approving the right application is the difference between success and failure.
Always use a professional tenant screening company and don’t cut corners. A good screening company will help you through the process and also help you understand the reports. Another common mistake I see is asking applicant’s to supply a copy of their own credit report. This is a very bad idea for two reasons. First, anyone can use a word processor or text editor to change or remove items from a credit report. Second, this practice can leave you exposed to violations of the fair credit reporting act.
The Rental Application
Standard rental application fees range from $20 to $75, per applicant, and you will find applicants are used to and willing to pay these fees. Your application fee should more than cover the cost to screen. Depending on your rental criteria, at minimum, order an address history report, consumer credit report, criminal report and eviction report on all applicants. Place orders only if the applicant meets your rental criteria, like income, time on job, etc.
Always use a comprehensive rental application. Provide a written copy of your rental criteria to explain under what conditions you will accept or reject their application. This helps weed out unqualified applicants so you can focus on qualified leads. Collecting the application fee along with the rental application is also a pre-screening tool and it shows the applicant is serious about renting. You will a complete and accurate rental application is very important at the end of the lease or in the event of eviction or skip.
Meet all applicants in person; we call this the rental application interview. First review the rental criteria, if not qualified return the paperwork and move on. Next, review all information on the rental application, check for missing information. Verify applicant’s identity with a government issued ID. During the interview check the ID with the rental application. Note the ID number and issue date directly on the application. Verify the name, address, date of birth from the ID match the rental application. Ask the applicant to verify, from memory, the date of birth and social security number on the application. Require applicants to supply a recent original paycheck stub and a recent utility bill at the interview. Require originals as copies could be altered. The paycheck stub is used to verify income, check for any garnishments and verify the year to date income. Use the utility bill to verify applicant’s current address and note any past due amounts.
Verification of Information
On Target Screening offer employment and rental history verification services. When possible use these services, keep in mind their highly trained staff can catch and raise red flags and other issues. Their experience is well worth the costs.
Employment verifications are tricky so it’s a good idea to require the original recent paycheck stub. Many employers will only verify a hire and termination date. Before contacting employers always verify the phone numbers with the yellow pages or other reliable online directories. To ensure accurate employment verification ask for human resources. Setup employment verification is not uncommon. Applicant provides a friends cell phone number as the employer, when you call to verify, the friend simply answers as the employer and provides the setup information.
Landlord verifications are tricky as well. It’s important to review your applicants address history report with the address history provided on the rental application. The address history report is a great tool to uncover hidden address history. The address history report will also suggest other locations where the applicant lived to check for evictions and criminal history. It’s important to verify ownership of the current and previous addresses with the local tax assessor before you verify rental history. If the property owner information does not match the information provided on the rental application, then it’s time to investigate. While it’s not uncommon for your applicant to be living with a family member, it’s very common to provide setup landlord information in order to hide negative rental history. If suspicious of a setup landlord reference, during your call simply switch two numbers in the property address, or the monthly rent amount. Keep in mind that a setup landlord reference often will verify anything you ask, a real Landlord or Property Manager will often catch it.
Require all occupants to be listed on the rental application (regardless of age). Add anyone over the age of 18 on the lease. In the event of eviction or skip, you have more options to collect.
Obtain at least one emergency contact, preferably family or a very close friend. This will be an important contact in an emergency, a skip or unpaid fees at the end of the lease.
Make sure the rental application provides consent from the applicant allowing you to pull any additional credit reports anytime during and after the lease expires. Without this consent, you are violating Federal Fair Credit Reporting Act guidelines if they pull consumer reports for reasons other than the initial resident screening process.
Other Suggestions
Use Craigslist.org to list available units and include photos of the property. Craigslist is very popular and the service is free in most areas.
Never accept checks for the application fee or security deposits, require money orders.
No personal checks for rent after the 5th, money orders only.
Stick to your rental criteria; studies indicate leasing to unqualified applicants can cost up to three times the amount of leaving a unit empty.
Avoid giving away the farm to rent your units.
Report all rental history to your screening company.
Approve borderline applications with either an increased security deposit or require a co-signer.
Any rent concessions always pay it at the end of the lease.
Thorough tenant screening provides you with a solid foundation of renters. The impact of cutting corners during the application process can severely impact your bottom line. Tenant screening is one expense well worth the cost, time and effort.
Never use your Tenant Screening Account to screen employees or employment applicants.
Tenant screening is one of those expenses that will more than pay for itself. It’s important to remember that tenant screening can make a difference between success and failure. Your success is dependent upon the rent being paid on time. If rent is paid late or at all, what happens is you must cover your expenses like maintenance and mortgage payments. The average eviction is around $1,500.00 and it can take a year or more to get past the loss. Approving the right application is the difference between success and failure.
Always use a professional tenant screening company and don’t cut corners. A good screening company will help you through the process and also help you understand the reports. Another common mistake I see is asking applicant’s to supply a copy of their own credit report. This is a very bad idea for two reasons. First, anyone can use a word processor or text editor to change or remove items from a credit report. Second, this practice can leave you exposed to violations of the fair credit reporting act.
The Rental Application
Standard rental application fees range from $20 to $75, per applicant, and you will find applicants are used to and willing to pay these fees. Your application fee should more than cover the cost to screen. Depending on your rental criteria, at minimum, order an address history report, consumer credit report, criminal report and eviction report on all applicants. Place orders only if the applicant meets your rental criteria, like income, time on job, etc.
Always use a comprehensive rental application. Provide a written copy of your rental criteria to explain under what conditions you will accept or reject their application. This helps weed out unqualified applicants so you can focus on qualified leads. Collecting the application fee along with the rental application is also a pre-screening tool and it shows the applicant is serious about renting. You will a complete and accurate rental application is very important at the end of the lease or in the event of eviction or skip.
Meet all applicants in person; we call this the rental application interview. First review the rental criteria, if not qualified return the paperwork and move on. Next, review all information on the rental application, check for missing information. Verify applicant’s identity with a government issued ID. During the interview check the ID with the rental application. Note the ID number and issue date directly on the application. Verify the name, address, date of birth from the ID match the rental application. Ask the applicant to verify, from memory, the date of birth and social security number on the application. Require applicants to supply a recent original paycheck stub and a recent utility bill at the interview. Require originals as copies could be altered. The paycheck stub is used to verify income, check for any garnishments and verify the year to date income. Use the utility bill to verify applicant’s current address and note any past due amounts.
Verification of Information
On Target Screening offer employment and rental history verification services. When possible use these services, keep in mind their highly trained staff can catch and raise red flags and other issues. Their experience is well worth the costs.
Employment verifications are tricky so it’s a good idea to require the original recent paycheck stub. Many employers will only verify a hire and termination date. Before contacting employers always verify the phone numbers with the yellow pages or other reliable online directories. To ensure accurate employment verification ask for human resources. Setup employment verification is not uncommon. Applicant provides a friends cell phone number as the employer, when you call to verify, the friend simply answers as the employer and provides the setup information.
Landlord verifications are tricky as well. It’s important to review your applicants address history report with the address history provided on the rental application. The address history report is a great tool to uncover hidden address history. The address history report will also suggest other locations where the applicant lived to check for evictions and criminal history. It’s important to verify ownership of the current and previous addresses with the local tax assessor before you verify rental history. If the property owner information does not match the information provided on the rental application, then it’s time to investigate. While it’s not uncommon for your applicant to be living with a family member, it’s very common to provide setup landlord information in order to hide negative rental history. If suspicious of a setup landlord reference, during your call simply switch two numbers in the property address, or the monthly rent amount. Keep in mind that a setup landlord reference often will verify anything you ask, a real Landlord or Property Manager will often catch it.
Require all occupants to be listed on the rental application (regardless of age). Add anyone over the age of 18 on the lease. In the event of eviction or skip, you have more options to collect.
Obtain at least one emergency contact, preferably family or a very close friend. This will be an important contact in an emergency, a skip or unpaid fees at the end of the lease.
Make sure the rental application provides consent from the applicant allowing you to pull any additional credit reports anytime during and after the lease expires. Without this consent, you are violating Federal Fair Credit Reporting Act guidelines if they pull consumer reports for reasons other than the initial resident screening process.
Other Suggestions
Use Craigslist.org to list available units and include photos of the property. Craigslist is very popular and the service is free in most areas.
Never accept checks for the application fee or security deposits, require money orders.
No personal checks for rent after the 5th, money orders only.
Stick to your rental criteria; studies indicate leasing to unqualified applicants can cost up to three times the amount of leaving a unit empty.
Avoid giving away the farm to rent your units.
Report all rental history to your screening company.
Approve borderline applications with either an increased security deposit or require a co-signer.
Any rent concessions always pay it at the end of the lease.
Thorough tenant screening provides you with a solid foundation of renters. The impact of cutting corners during the application process can severely impact your bottom line. Tenant screening is one expense well worth the cost, time and effort.
Never use your Tenant Screening Account to screen employees or employment applicants.
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