Calling Out Financially Dishonest Tenants: How to Catch Fake Pay Stubs
Unfortunately, we live in a world where fake pay stubs exist.
If you’ve been a landlord for a while, you’ve probably come across a couple of these counterfeit documents during the application stage (or you’ve at least heard of someone else who has). The challenge is how to easily spot them, so you don’t approve a bad prospect who becomes a bad tenant.
That problem is huge for you, as it directly affects your cash flow as a real estate investor. Renting your property out to incapable tenants only poses a problem down the line—and possible eviction.
Since you can’t stop people from faking pay stubs, you need to know exactly how to spot a fake during the background check which is what we are covering today.
4 Ways to Spot Fake Pay Stubs
Paycheck generators nowadays are awfully good at what they do. Some will even charge a small fee to produce high-quality forgery—making it easy for anybody to get their hands on impressive-looking pay stubs to trick landlords.
Nevertheless, these are the tell-tale signs of fake pay stubs that you can keep in mind:
1. There is a lack of professionalism.
Of course, the most unambiguous indication of a fake document is the lack of professionalism.
It’s rare for a real company to allow its human resources or accountants to produce employee documents that look blurred, have spelling errors, or use strange fonts. They also don’t tolerate bullet points or charts that aren’t evenly lined up.
A fake pay stub, however, could unconsciously use questionable fonts, have alignment issues, and aren’t printed with quality in mind. Plus, most businesses use accounting software that will automatically line up the content neatly, so keep an eye out for anything that seems off.
2. The numbers are perfectly round.
Take a look at the applicant’s monthly earnings. Are the numbers perfectly rounded to the nearest thousand? You may think that there’s little difference between earning $2,500 and $2,498.75. But the latter figure is more realistic, as employees rarely take-home paychecks with a round number—especially after the accounting department deduct taxes.
3. There are typos—such as letters for numbers.
Counterfeit paycheck stubs may have typos, such as using the capital letter O instead of a zero. You’ll have to carefully look for these subtle differences because it’s a clear sign of a fake document. The more you practice looking out for Os as zeros, the faster you’ll be able to spot them.
After all, 1OOO looks quite different from 1000 in most cases.
Remember that professionals won’t make this mistake. In fact, some official documents differentiate the two characters by using a line through the zero, which looks like this: 1θθθ.
4. There is inconsistent or missing information.
Another huge red flag is inconsistencies or missing details in the pay stubs. For example, if the year-to-date gross income is less than the year-to-date net pay—that’s probably a fake pay stub. No business allows that kind of mistake.
Aside from the gross pay, you should also comb through the insurance deductions, net income, taxes, applicant’s name, home address, company name, office address, social security number, and other information that could show inconsistencies. Official documents usually list these details multiple times, so ensure that they all match up perfectly.
Any inconsistencies or missing information may mean the applicant generated the document online.
Other Income Verification Methods
Unfortunately, spotting fake pay stubs is proving to be increasingly difficult as pay stubs generators up their game. So, it’s important to use other proof of income verification methods to minimize your chances of getting scammed, like asking for these documents:
- W-2 Tax Form: The document with the applicant’s wage and salary information, such as their gross earnings, taxes, and deductions.
- Bank Statements: The statements that show the applicant’s transactions over a month. You’ll get to check if the tenant deposits the income amount they’re claiming to earn.
- Social Security Statement: The statement that shows the amount an applicant has paid in Social Security and Medicare taxes.
- IRS Form 1099: A tax document often used by freelancers and independent contractors, reporting the total amount of payments they’ve received from an entity or person.
- IRS Form 4506: Also called the Request for Copy of Tax Return, this is the transcript of the applicant’s federal tax record.
It’s also a good idea to ask for an employment verification letter or call the employer yourself to check.
Pro tip: Don’t ask the applicant for their employer’s number—because they might give you a fake one. Do your own research instead to contact the company.
The human resources department can’t confirm how much the employee makes. However, they can confirm that the company is legitimate and it is where the applicant works.
Fake Pay Stubs = Fake Cash Flow Assurance
You always want to conduct due diligence to ensure that you accept a capable and honest tenant. Not everyone is trustworthy. That being said, thorough tenant screening and the knowledge of how to sniff out suspicious documents will help you sift through the applicants and spot good people.
At the end of the day, the better tenants you accept, the greater your chances of conducting a successful rental business. You want to have responsible renters who’ll pay rent, maintain the property, and keep open communication with you—right from the very first step of the application process.
Any other ways you try to spot fake pay stubs? Share it with us below!
As a property management company in Metro Detroit for decades, we’re very familiar with fake pay stubs and can spot them from a mile away. Reach out to us for expert tenant screening today.