Perhaps the most important step in tenant screening is to make sure that applicants can likely make payments each month without stretching too far. Unfortunately, some applicants will pass along fake pay stubs to appear more able to pay the rent.
Importance of Verifying Income
The most obvious qualification for an applicant is someone who can feasibly pay the rent each month without struggling.
Knowing an applicant’s income helps establish their debt-to-income ratio (DTI). One applicant could have a higher income, but they may have far more debt and therefore be a less qualified applicant.
A tenant who makes $100,000 per year but has significant monthly debt is likely less qualified than an applicant who makes $80,000 per year and has no debt.
A landlord who has to deal with missed payments, late payments, paying in installments, or a tenant who begs and pleads for leniency with rent payments is a headache no one wants to deal with.
There are few things worse than an unqualified tenant, as they are at much greater risk for eviction. With T the average eviction costs between $3,500 and $10,000, learning to spot fake pay stubs can be a valuable skill in determining the quality of your applicant and helps you to avoid future tenant drama.
Why Do Applicants Fake Pay Stubs?
For a less qualified applicant, finding a decent place to rent can be a challenge. Most landlords are going to verify income, meaning that it could be difficult for a low-wage earner to get into a property.
However, why would an applicant want to get into a property that they can’t pay for?
There are a few reasons. Perhaps they believe that a nice raise is coming soon, or they plan to find a better job soon. It could also be something more nefarious, as in they just hope to cover rent for a few months, and then delay and give excuses until they get kicked out.
No matter the reason, landlords shouldn’t skip the income verification process, or provide any leniency to less qualified applicants.
Some tenant screening companies will offer a financial profile report for applicants. This is a terrific way to verify not only income but bank account balances and expenditures.
11 Ways to Spot Fake Pay Stubs
While any one of these might not be overly common, altogether you can have a good idea of the best strategies to uncover fake pay stubs.
- Sloppy mistakes – Real pay stubs are unlikely to have issues like typos, columns/rows not lining up, or even an “O” instead of a zero.
- Watermarks – Sometimes online fake stub generators will have a free version that lets you test out their product, but those will have a watermark on them until paid for. If you see a watermark on a pay stub, it means the applicant used one of these online generators.
- Rounded numbers – Rarely do people earn exactly a round number, especially if it’s an after-tax number.
- Pay dates don’t have a pattern – Most employers pay either every two weeks or twice per month. Look for pay dates that are either two weeks apart (e.g. every Friday) or on the same two dates each month. With twice-monthly payments, it’s possible that a certain pay date ends on a weekend or holiday, so there could be a 1-3-day discrepancy.
- Google the company – If the applicant knows that you’re going to try to talk to their employer, they may list an entirely fake company on the application. Then they would give you the phone number of a friend to pretend to be their employer. A quick search can uncover the truth.
- Inconsistent personal information – This could mean that personal information is excluded altogether, or it’s missing certain pieces that should be on there. For example, most pay stubs will include name and address.
- Missing company information – Usually a pay stub will include the company’s name, address, and Employer Identification Number. The name of the company and the name of their employer/reference should obviously match
- The numbers don’t make sense – Most landlords have likely seen enough pay stubs to know when the numbers don’t add up. For example, if the deductions or taxes are too high or too low, or the net pay seems out of whack with the gross pay.
- Overall unprofessional feel – Even if you can’t necessarily pinpoint the reason, you can still sense that it may just not look or feel right. Perhaps the font is off or disorganized in the way it presents the information.
- One is not like the others – If you’re looking at pay stubs for 5-10 applicants, one that is completely fake will likely stand out like a sore thumb.
- Physically off – Many pay stubs are sent digitally now, but physical copies are still used and they are harder to imitate. If the paper doesn’t feel right or the numbers are blurry, then you may be looking at a fake.
What Information Does a Legitimate Pay Stub Have?
Typically (but not always), real pay stubs will have:
- Gross wages
- Tax deductions for federal, state, Social Security, and Medicare
- Miscellaneous deductions (401(k), insurance)
- Net pay
- Year-to-date numbers for all of the above
- Employer information
- Employee information
Verify Income With Other Methods
The unfortunate reality is that it’s usually difficult to tell if a pay stub is forged. There are online generators that can do it for you.
Or more likely, someone will take a real pay stub, and just alter a couple of numbers on it— a task easily accomplished by someone with basic Photoshop skills. In rare cases would someone actually create a pay stub from scratch. Anyone can easily go online and find a picture of a pay stub as a starting point and edit it.
All landlords should verify income in multiple ways to verify if the stubs are fake (and then deny the applicant). Here are a few ideas:
- Talk to the employer – This is the best strategy. However, this can be faked as well, if the applicant gives you a false reference. There are many ways to avoid talking to a fake employer reference, but one of the best is to ignore the number given on the application and call the number listed on the company’s website instead.
- Request W-2 – These tax statements will show how much the applicant made in the previous year.
- Request bank statements – With bank statements, landlords can see how much money is going in and out of their accounts. This is especially useful for someone who’s retired and/or has a good chunk of money. They may not need an income in order to pay rent for the foreseeable future.
- Request other proof of income – Many people have sources of income outside of a job. This can include social security, government assistance, or alimony and child support payments. Remember, as a landlord you cannot discriminate against someone for their source of income, nor against their familial status for having children or being divorced.
What Should I Do if an Applicant Submits a Fake Pay Stub?
If you feel concerned an applicant has falsified their documents, there are a few additional steps you can take to put your mind at ease.
- Let the applicant know you are having difficulty verifying their proof of income.
- Ask for additional income verification documents such as bank statements or tax returns.
Most often, a dishonest applicant won’t continue to try to push the situation whereas a truthful applicant won’t mind a few extra steps to confirm their information.
If you do choose to rightfully deny the rental application, make sure you don’t mistakenly break any Fair Housing Laws.
Can Rental Applicants Get in Trouble for Submitting Fake Pay Stubs?
It is illegal to forge pay stubs. However, there isn’t much a landlord can do other than deny the application.
On the other hand, if you find the applicant has falsified documents after renting to them, you should contact your attorney. It is within your rights to evict the tenant and may be worth it to sue them in small claims court.
