Welcome to the first installment of my new series, From the Trenches. Our fraud-detection team scans 2200 residential rental financial documents each month. They have their ears to the ground and see all the latest techniques bad actors are using to fraudulently get approved for properties they are manifestly unqualified. In other words, our fraud-detection team has the goods on what the bad guys are going to try in order to defraud property managers.

We’ve decided to create this series (From the Trenches) so we can educate the industry on the problem. In this installment, we look at that common staple of income verification, the pay stub. What we’ve found is very disturbing, but we also shed light on how to protect yourself.

The Simple Pay Stub

Pay stubs are so simple. They verify employment and income in a single, simple, easy to read document. They are SO much easier than calling the HR department of the applicant’s employer to try to verify employment and income. Today, many companies won’t even talk to you for fear of being sued if they make a mistake.

But can you trust that simple little document?  Not so much, according to experts. One fraud expert estimates that 1 in 5 paystubs are fake[1]. This estimate fits well with our own internal statistics. How are fraudsters generating these fake pay stubs? Quite easily, as it turns out.

How to Appear Rich in 5 Minutes or Less

Everyone wants to be rich. But that takes so much work. The second best thing? Look like you’re rich. And that is easy. Fraud expert Frank McKenna decided to explore just how easy a few years back, and after just a couple of days of investigation, found more than 160 sites that will generate any kind of pay stub your heart desires.[2]

Want to show that you’re pulling down $500,000 per year working as a studio exec in Hollywood?  ThePayStubs.com can help with that. Don’t have the suntan to pull that off? Be a $650,000 per year New York attorney courtesy of PayStubs.net. Maybe your needs are more modest? Show you make $95,000 per year as a city sanitation engineer courtesy of PayStubs.now.

Here’s the kicker—none of these sites takes more than 5 minutes to generate a professional, apparently legitimate pay stub. And most are inexpensive or, in some cases, free. 

Is This Legal?

Is it legal to create a fake pay stub and submit it to a landlord as proof on employment and income?  Absolutely not. In fact, virtually every fake pay stub site will tell you that, usually right next to where they assure their fake stubs look 100% legitimate.

The FTC has started to crack down on these sites. In fact, they shut down three operators of such a site a few years back.[3] Has that helped? Well, here’s a revealing experiment. Google “FTC Pay Stubs.” The first half-page of websites that Google lists are purveyors of fake paystubs. And Google “Fake Pay Stubs” and it’s clear the FTC has not made a dent.

Protect Yourself

So, what can you do to protect yourself from these fraudsters? I’ve seen an alarming number of properties who’ve decided to just stop trying. They assume the pay stub is fake, so they don’t even ask for it.

Please don’t do that!  In these COVID pandemic times, you cannot afford to let a bad actor into your building. Instead, try one (or more) of these simple safeguards:

·       Call the Employer. Do your own research. Get the phone number off the internet (don’t use the one the applicant helpfully provides, but which may be his roommate). Does the applicant work there?  Is their stated income correct?

One potential problem is that not all employers will help you. But this is your first line of defense.

·       Do the Math. Check the numbers on the paystub. Are the taxes correct?  Do the totals add up?  Not all fake paystubs do their own math – some require the fraudster to fill in the numbers. And not all fraudsters are smart enough to get that right.

We live in troubled times. Fraud is up, and the cost of fraud is skyrocketing. You need to stay alert, and take precautions to avoid disaster. Hopefully, this installment helps with that.

Stay Tuned for our Next Installment: Fake Bank Statements