Synthetic identity fraud is quietly becoming one of the most complex and costly threats in the rental housing industry. Unlike traditional identity theft, where someone assumes another person’s real identity, synthetic fraud combines real and fake information to create a new, fraudulent identity. For property managers, this shift means that standard tenant screening processes are no longer enough. The landscape is changing—and fast.
What Is Synthetic Identity Fraud?
Synthetic identity fraud involves piecing together personal information (like a real Social Security number) with fictitious names, addresses, or other data to form a new, seemingly legitimate identity. These fake identities are then used to apply for lines of credit, government benefits, or, increasingly, rental properties.
The 2024 State of Identity Fraud Report by AuthenticID found that nearly 50% of businesses experienced a spike in synthetic fraud in the past year. These fraudsters are getting smarter, often powered by generative AI tools and supported by disreputable credit repair services that help them build “credit” under these false identities.
Why It Matters for Property Managers
The rental industry has become a prime target. According to the National Apartment Association, 85% of identity fraud in the rental space is now synthetic. For landlords and property managers, this type of fraud poses unique challenges:
- Applications appear clean on the surface
- Credit scores may be artificially boosted
- References and job histories are often fabricated
Once these fake tenants move in, the consequences can be costly: missed rent, property damage, or even legal hurdles during the eviction process.
Red Flags to Watch Out For
You might be wondering—how do you spot synthetic fraud if it looks legit? Great question. While there’s no single telltale sign, these are some common red flags:
- Inconsistent personal data (e.g., mismatched names and addresses)
- Newly established credit profiles with high limits
- Thin credit files or no credit history
- Multiple applications from the same IP address
- Applicants unable to verify basic details during follow-up
As highlighted in StateScoop, synthetic identities are increasingly used for fraudulent accounts and unauthorized benefits, and their sophistication continues to grow.
The Tech That’s Fighting Back
So, what can property managers do? The industry is turning to smarter solutions. Multi-layered identity verification, like facial recognition paired with government ID validation, is one key approach.
In its 2024 report, Experian emphasized that balancing security with user experience is critical. While added layers of verification can slow down applications, they’re increasingly necessary to weed out fraud.
Companies like Yardi are stepping up to meet this challenge. Through a partnership with SentiLink, Yardi now offers built-in fraud detection that flags suspicious credit profile numbers (CPNs), helping landlords identify synthetic applications before it’s too late.
The Link Between Data Breaches and Fraud
One of the driving factors behind synthetic identity fraud? Massive data breaches. The more personal data circulates on the dark web, the easier it becomes to mix and match into fake profiles. This reality is pushing more property managers to evaluate their screening protocols and invest in tools that verify identity beyond the basics.
Real Impact on the Screening Process
The rise of fraud in rental screening is shifting how the industry views tenant background checks. Traditional screening methods—like checking credit scores and employment—can be gamed. Instead, smart tech solutions now look at behavioral patterns, document authenticity, and even biometric markers.
Here are some tools and tactics gaining popularity:
- AI-driven pattern recognition in applications
- Real-time cross-referencing of government databases
- Two-step identity verification
- Use of digital footprints and device intelligence
This approach helps ensure that tenant matches are genuine—a critical shift as property managers face increasing pressure to fill units quickly without compromising security.
How to Protect Your Property Without Alienating Renters
Balancing fraud prevention with renter experience is tricky. Too much scrutiny, and you risk turning off great tenants. Too little, and you open the door to bad actors.
Here’s how to strike that balance:
- Be transparent with applicants about screening tools
- Offer a clear explanation of why additional steps are required
- Focus on tools that validate, not just penalize
Modern renters appreciate transparency and safety. Let them know that tighter screening helps protect all tenants, not just your bottom line.
What Tenants Should Know (and Do)
Tenants, too, should understand what synthetic identity fraud means. Here are some quick tips for renters to avoid being mistaken for fraudsters:
- Use consistent information across applications
- Be ready to verify identity with official documents
- Understand your own credit profile
- Avoid using services that promise to ‘fix’ credit quickly—many use shady tactics
In some cases, renters considering a move—particularly downsizing for retirement—should also ensure that their personal info is protected as they navigate new housing situations. Older adults are often more vulnerable to identity theft due to larger digital footprints and less tech-savviness.
Final Thoughts
Synthetic identity fraud is more than a buzzword—it’s a growing crisis in property management. From generative AI to breached data, bad actors are using new tools to fake their way into rentals. For property managers, ignoring the threat isn’t an option.
But the good news? Technology is rising to meet the challenge. By leveraging modern screening tools, staying informed about emerging threats, and keeping tenants in the loop, landlords can better protect their properties and communities.
The future of rental security lies in innovation—and in not being fooled by a name that isn’t real.
