In the immediate aftermath of the devastating inferno, the 52-year-old was assigned family liaison officers after he claimed that he lost his wife and son in the fire.
He attempted to claim financial support stating he had lost all his property.
Detectives from the Metropolitan Police have since arrested him on suspicion of fraudulently attempting to gain money and housing.
Officers began investigating after they realised there were inconsistencies with the man's stories. They spoke with residents in the Grenfell Tower flats who confirmed he didn't live at the address.
Relatives of the resident of the flat the man claimed to live in have been spoken to by their family liaison officers and made aware of this investigation.
Officers have also traced the address in Bromley where the man was living at the time of the fire, which has been independently evidenced. It has also been established that the man does not have a wife or child.
The investigation has been into fraud and officers have said they are not linking it to sub-letting or immigration and believe he worked alone.
Detective Superintendent Fiona McCormack, said: 'The distress and suffering caused to so many families and loved ones that night is harrowing.
'That night people lost their homes, all their possessions and tragically their families and loved ones. The focus of all of us should be on supporting victims and families, recovering loved ones from Grenfell Tower and investigating the fire.
'I have made it clear that we are not interested in investigating things such as sub-letting or immigration matters as I want their help - and do not want there to be any hidden victims of this tragedy.
'However, we will robustly investigate any information about anyone who seeks to capitalise on the suffering of so many.'
The man was arrested on the evening of Wednesday, 28 June, and is in custody at a west London police station, but not in the borough of Kensington and Chelsea.
He was arrested on suspicion of fraud.