Instructions on creating a fake bank statement are available web tutorials and step-by-step YouTube videos. Some companies even offer their services. In 2018, the Federal Trade Commission, an agency that enforces civil U.S. antitrust laws, filed three separate cases alleging that three people and their companies sold customers fake pay stubs, fake bank statements and other fake financial documents, according to an FTC press release. These companies weren’t subtle on their websites, with proclamations like “Quality Authentic Fake Forms! Proven to Work!”
People can use fake bank stubs to misrepresent their finances on residential rental applications and for other purposes. Before agreeing to permanently shut down their businesses as part of separate settlements with the FTC, the companies were selling fake documents for between $20 and $150 each. One operator ran another website called iVerifyMe.com that sold job verification services that would “confirm to anyone who asks” the customer’s hire date and hourly wage.
“The sale of fake documents makes it easy for identity thefts and scammers to ply their trade,” said Andrew Smith, Director of the FTC’s Bureau of Consumer Protection, in the press release. “This action demonstrates the FTC’s determination to stop those who help people to commit identity theft and fraud.”
How to fight fraudulent rental applications
Unfortunately, the problem of rental applicants providing fake bank stubs hasn’t gone away in the years since those settled cases. In fact, it’s worsened during the pandemic, according to Spirited’s “2020 Effects of the COVID-19 Pandemic on Residential Rentals Survey.” The percentage of fraudulently altered applications has increased from 15% before the pandemic to 29% in September 2020. One in 10 fraudulent applications used to go undetected. Now, it’s one in four.
That increase in the number of undetected fraudulent applications can partly be attributed to the difficulty in detecting fraud when documents are submitted via online applications. That’s become more common during the pandemic. While not infallible, knowing what to look for can help property managers better spot fake bank statements and help avoid evictions, which can cost as much as $7,500 per case. Here are three strategies to identify them.
#1 – Look for inconsistencies on the bank statement
The first potential red flag involves the bank statement’s appearance. Are the font type and size consistent with what’s on other bank documents? Do decimals and other elements on the statement line up since they should if they’ve been produced using professional software. Is the bank logo on the statement of low resolution or different than the logo on the bank’s website? Someone creating fake bank statements may get lazy or sloppy with any or all of these details.
Then, look at financial inconsistencies. Does the math make sense? Does the ending balance on one bank statement match the beginning balance of the following statement? Is there an excess of funds but also an excess of overdraft fees? Are there withdrawals that look suspicious? Any of these could mean more research is needed.
#2 – Make sure the numbers check out
Once you have the applicant’s bank statements from the previous 30 to 90 days, compare the pay amount and employer on their direct deposits with the details on their bank stubs, according to the American Apartment Owners Association blog post “Tenant Fraud is Rising: What Can Landlords Do?” If they deposit their paychecks themselves, compare their take home pay with their check deposits. And when considering their current rent, since most people pay rent by check, the amount on their bank statement should be consistent with the rent they listed in their rental application.
“You may find in the next year that more applicants have employment gaps, missed payments or lower credit,” writes the association. “What’s most important is to find applicants who are honest with you. Having accurate information and data can help you be more comfortable renting during this uncertain time.”
When running over the numbers, I’d recommend keeping one thing in mind. People who create fake bank statements will often use round numbers. Whether we’re talking about a paycheck amount or a rent payment, a rounded number is unlikely. If the bank statement contains multiple rounded numbers, that could be a red flag.
#3 – Talk to a bank representative
If you’re uncertain whether you’ve received a fake bank statement or not, one way to get answers is to reach out to a bank representative. Call the bank – using a number you’ve obtained yourself and not the one written on the application – and ask a representative to confirm the details in the bank statement supplied by the applicant.
If the representative isn’t comfortable supplying that information, you can email the document to them and ask for a confirmation that the bank issued the bank statement. Unfortunately, you may not get much support from the bank. While some banks try to prevent manipulation of documents by applying security features to PDF files, these measures are typically centered around protecting investment accounts.
Even when used with bank statements, they are not infallible to a determined fraudster because “inevitably, all PDF files are editable,” writes Peter Davis, CPA, in the article “Fraudulent Manipulation of Bank Statements in Electronic Format.”
“Changes made to bank statements are virtually impossible to identify without having a copy of the original bank statement to compare them to,” he cautions.
Detect fake bank stubs with Spirited
Fake bank stubs can resemble the real deal and be challenging for residential property managers to catch, especially with templates so readily available online. Spirited’s fraud detection software fights financial document fraud submitted within rental applications. Our AI-enabled image analysis solution scrutinizes documents for authenticity and manipulation and certifies whether they’re fraudulent or authentic within 24 hours. By implementing our technology, property managers can spot fake bank stubs and other fraudulent financial documents that slip by other tenant screening tools. This can save time that would otherwise require people to study documents and decrease evictions by catching fraudulent residential applicants. Reach out to us today if you’d like to get a demo of Spirited’s solution.
