As applicants trail in, many will edit their documents to improve their perceived ability to pay rent. Additionally, the industry has seen a surge in professional fraud rings that are now infiltrating apartment communities. Either way, fraudulent documents often take place in the form of bank statements, pay stubs, investment accounts, and tax transcripts. Applicant fraud is one of the most prevalent forms of fraud across multifamily. Not only is it frequent, but it is also costly for property management companies.
But how big is its impact really? Here are some surprising, yet true realities1 of applicant fraud across multifamily:
An application that starts with fraudulent documents is seven times more likely to end in bad debt or eviction.
At the start of leasing season in 2023, it was reported that 10 million fake income documents were submitted to property managers in the previous 12 months. And that’s just what was reported.
It is estimated that across the 10 million fake income documents, the multifamily industry saw $1.85 billion in bad debt and eviction loss as a result.
In metropolitan cities, 50% of all evictions are directly linked to a tenant’s application being fraudulent.
Research shows that 80% of property managers have seen application fraud over 20 times in their career working on-site.
Of your applicants, fraud is nearly ten times more prevalent in income documents than in identification documents.
Specifically in Snappt’s platform, fraud has increased exponentially since COVID-19, with a 93% increase in document fraud.
Fraud detection comes in many forms. While there are ways to detect fraudulent applications manually, most altered documents are hard to spot with the human eye. The widespread availability of technology has significantly increased the ease with which people can commit applicant fraud, rendering it more accessible than ever. Moreover, it has grown progressively sophisticated, thereby posing a greater challenge for detection without advanced tools and expertise.
Fortunately, as the technology to enable applicant fraud has become more sophisticated, so has the technology to prevent it. This is why we highly encourage the use of technology to do detect fraud for you. Fraud-detecting technology has the ability to analyze signatures, verify identity, and scan for digital alterations.
All in all, there are many tech stacks to choose from, so it's important to simplify by selecting one that covers the most application fraud touchpoints so you can see the most ROI. Want to know how you can catch 99.8% of documents through ResMan’s platform? Chat with us about ResMan Fraud Detection powered by Snappt.
1Statistic sources: Snappt
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