You know, I’m not sure there isn’t a commercially viable product idea here.

Of course, it’s often a scam. But application fees can be legit. The key is how they are administered.

The fee should not be non refundable, just not refunded under certain specific circumstances.

It’s not fraud if you tell the applicant what the rental criteria are and what happens to the money if they are turned down.

In ancient times, I was a small time landlord. On a couple of occasions I asked for an application fee. I followed these rules, which I explained to the applicant:

1. The application fee was refunded if I turned down the applicant, provided the background check did not disclose a lie on the application.
2. The application fee was applied to the security deposit if I granted the rental.
3. The application fee was not refunded if the background check found a lie on the application, or if I granted the rental and the applicant changed their mind and declined to rent.

It costs money to do background checks. I wasn’t going to be out of pocket if an applicant was dishonest with me.