Rental fraud in Canada is not a niche problem anymore.

Toronto renters lost $2.3M to rental scams in 2025. The number of suspicious listings reported across Canada has nearly tripled since 2021. And one Canadian property management company found that 90 out of 175 applications it processed contained falsified pay stubs, fake credit reports, or invalid ID.

Some of this fraud targets renters. But a lot of it targets landlords, specifically landlords who are busy, moving fast, or haven't updated their screening process in a few years.

Here's what's circulating right now and what the red flags look like before you hand over the keys.

What Is Rental Application Fraud and How Common Is It?

Rental application fraud means a prospective tenant submits false or manipulated information to get approved for a unit they otherwise wouldn't qualify for. The fraud can be minor (slightly inflated income) or extreme (entirely fabricated identity, employment, and rental history).

Industry data puts fraudulent applications somewhere between 15% and 50% of all applications received, depending on the market and how rigorously landlords are checking. In tighter rental markets like Vancouver and Toronto, the incentive to falsify is higher.

The Canadian Anti-Fraud Centre flagged a steady rise in fake identity and document submissions connected to housing in its 2024 report. The tools to create convincing fake documents are now widely accessible and cheap.

What Are the Most Common Tenant Scams in Canada Right Now?

1. Fake Pay Stubs and Bank Statements

This is the most common form of application fraud. Tenants use graphic design tools or online templates to generate pay stubs that look legitimate.

Red flags:

• Round numbers throughout (no cents, suspiciously clean totals)
• Employer name that doesn't show up in a basic Google search
• Inconsistent fonts or formatting on a single document
• Pay stub doesn't match CRA template formatting for the claimed employment type
• Employer contact information goes to a personal Gmail or voicemail-only number

What to do: Don't accept pay stubs directly from the applicant as your only income verification. Ask for a Notice of Assessment from the CRA, or request a direct employment verification from HR using contact info you look up yourself.

2. Fabricated Employment Letters

Employment letters are among the easiest documents to fake. A tenant asks a friend or accomplice to act as their employer, provides a phone number that routes to that person, and confirms everything you ask.

Red flags:

• Employment letter comes from a generic email address (Gmail, Hotmail)
• The company has no website, no LinkedIn presence, no business registration you can find
• The HR contact number goes directly to the person's personal phone

What to do: Verify employment using contact information you find independently. Search the company in the provincial business registry.

3. Rent Overpayment Scams

A tenant sends a cheque or money order for more than the deposit or first month's rent, then asks you to refund the difference. The original payment later bounces, and you're out whatever you sent back.

Red flags:

• Overpayment with an explanation that sounds plausible
• Urgency around getting the refund processed quickly
• Request to send the refund via wire transfer or gift cards

What to do: Never refund a payment before it has fully cleared in your account, not just showing as pending.

4. Professional Tenant Fraud

Professional tenants move in with no intention of paying rent, relying on the length of the eviction process to stay as long as possible for free. They know how long the Residential Tenancy Branch or Landlord and Tenant Board process takes.

Red flags:

• Multiple short tenancies in recent history with vague explanations
• Previous landlords who are hard to reach or give oddly brief references
• Pressure to sign quickly or skip steps in screening
• Reluctance to authorize a formal credit check

What to do: Contact previous landlords directly. If the current landlord seems suspiciously positive, try to reach the one before them.

5. Deepfake and AI Identity Fraud

Fraudsters use AI to pose as a different person during virtual property tours or video calls. The identity they present doesn't match who actually moves in.

Red flags:

• Unnatural facial movement or audio sync during video calls
• Reluctance to meet in person before lease signing
• Inconsistencies between ID photos and video appearance

What to do: Require in-person identity verification with government-issued photo ID before signing the lease.

6. Synthetic Identity Fraud

Combines real information (a legitimate SIN, a real address history) with fabricated details to create a new identity. The resulting profile has thin but technically real credit history.

Red flags:

• Credit history that seems too short for the applicant's claimed age
• Slight inconsistencies between documents that each look legitimate on their own

What to do: Run a full credit report and look for consistency across all documents.

7. Emotional Pressure and Sob Stories

A tenant creates urgency or sympathy to push you to skip steps in your screening process.

Red flags:

• Extreme urgency with no flexibility
• Requests to skip the credit check
• Offers to pay extra in cash to bypass standard steps

What to do: Apply the same process to every applicant, every time. Compassion is fine. Deviating from your screening criteria is not.

How Do You Verify a Rental Application Without Getting Fooled?

• Income: Request a CRA Notice of Assessment, T4, or three months of bank statements
• Employment: Search the company in the provincial business registry and LinkedIn before calling
• Rental history: Call previous landlords from numbers you find independently
• Identity: Verify government-issued ID in person before signing
• Credit: Run a formal credit check with written consent, compliant with PIPEDA

Property Copilot's screening tools standardize this process so the same steps happen for every applicant.

What Should I Do If I Suspect Fraud After Someone Has Moved In?

Document everything. Report to the Canadian Anti-Fraud Centre (antifraudcentre.ca) and local police.

Contact your provincial residential tenancy authority:

• BC: Residential Tenancy Branch (RTB)
• Ontario: Landlord and Tenant Board (LTB)
• Other provinces: Contact the equivalent housing tribunal

FAQ

How common is rental fraud in Canada?

Multiple Canadian property management companies report 15% or more of rental applications contain some form of fraudulent information. The Canadian Anti-Fraud Centre reported a steady rise in 2024.

What documents are most commonly faked?

Pay stubs, employment letters, and bank statements. They're the easiest to replicate and hardest to verify without going directly to the source.

Can I legally run a background check on rental applicants in Canada?

Yes, with written consent. Must comply with PIPEDA and applicable provincial privacy legislation.

What is the eviction process if a tenant committed fraud to get in?

In BC, apply to the Residential Tenancy Branch. In Ontario, apply to the Landlord and Tenant Board. You'll need documentation of the fraud.

How do I verify a pay stub without asking for more documents?

Ask for a CRA Notice of Assessment. It reflects actual reported income and comes from the CRA, not the tenant.

A strong screening process is the best protection you have. Property Copilot helps Canadian landlords run consistent, documented tenant screening so nothing falls through the cracks.