Is That Pay Stub Legitimate?

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The current rise in application fraud is alarming. As a result of it, alert landlords now routinely request bank statements to determine cash flow and pay stubs to verify employment and income.

Unless a person is extremely well versed in computer technology, it is difficult to get creative with a bank statement, so they are usually dependable. On the other hand, a pay stub is fairly easy to counterfeit. There are even websites that will create custom pay stubs for use as proof of income using an online pay stub generator.

But when confronted with a counterfeit pay stub, how is a landlord or property manager to know that it is not real?

Obvious Red Flags

The most obvious red flag when looking at a fake pay stub is when the formatting is off. Look for a variety of fonts and columns that are not properly aligned. Spelling, awkward language and grammatical errors are sure signs of counterfeiting. Inspect the stub for blurry or pixelated elements.

Next, look for missing information that would typically be included on a pay stub:

• Employer’s logo, name and address.
• Employee identification number.
• The pay period’s start and end dates.
• Total hours worked.
• The total amount earned before taxes (gross pay) and the amount left after deductions (net pay).
• Deductions, such as amounts withheld for taxes, health insurance, retirement funding and other programs.
• Other non-taxable additions, such as expense reimbursements and paid time off (PTO).

Check the Numbers

If you carefully examine the numbers on the pay stub, there are some sure giveaways that the stub is not legitimate:

• Amounts are rounded up to zero. As an example, the net pay may be listed as a rounded number, such as $2,300 instead of $2,296. After deductions, it would be unusual to see a perfectly rounded figure.
• When the letter “O” replaces the number “0”, it’s a strong indication of a fake pay stub. Companies employing payroll software rarely make this oversight. Authentic documents often use a slashed zero “Ø” to avoid confusion.
• If the numbers don’t add up or if deductions don’t seem to correlate with the gross pay, take caution. You may be dealing with fake pay stubs. 

Inconsistencies

One of the easiest signs that someone has submitted a falsified pay stub is inconsistent data. Watch out for the following examples:

• Miscalculations regarding a pay period, uneven totals or discrepancies between gross pay and net pay are sure indicators of a fraudulent pay stub.
• Deductions for Medicare taxes, Social Security taxes, insurance deductions and retirement contributions are always included on a legitimate stub. Federal, state and local tax rates should be cross referenced if the amounts don’t appear to be accurate based on the stated income.
• Is the applicant’s income as reported on the pay stub consistent with the industry standard for his stated job title or is the pay stub displaying exceptionally high earnings or bonuses for that position?

Employment Verification to the Rescue

Artificial Intelligence software and machine learning are becoming more popular and will make generating pay stubs easier, making it more difficult to spot a counterfeit pay stub.

Although third-party verification services have access to databases with real-time employment data and can confirm the accuracy of an applicant’s employment with ease, they are also very expensive to use.

Fortunately, you have easy access to AAOA’s Employment Verification service. For a modest fee, AAOA’s experts will contact the employer directly and ask the questions you want to know:

• Is the applicant employed at that company?
• What is (was) their title?
• When did they start? Are they still employed there? If not, when did they leave the company?
• What kind of an employee were they? Did they get along with their co-workers?
• Would you hire them again?

By using this service, You don’t have to guess whether the applicant actually works at the company they claim they do.

Employment Verification can be ordered at the same time you order an AAOA rental credit report and/or tenant background check or on its own as an individual report.

Don’t be a victim of application fraud. It’s critical that you recognize the red flags to safeguard your investment.