The escalating trend of renter fraud

Recent data unveils a worrying trend: multifamily risk experts TheGuarantors has seen a startling 164% surge in denials stemming from fraud in the past 18 months. In addition, according to Snappt, a fraud detection company, as many as 1 in 8 rental applications contain some type of fraud. Understanding and mitigating this threat is paramount for multifamily housing professionals to protect their NOI and communities.

Understanding the drivers of fraud 

  • Digital evolution of multifamily: The industry has brought previously in-person elements of the leasing process online. With virtual tours and online applications becoming mainstream, it's easier for fraudsters to exploit the system.

  • COVID: The pandemic catalyzed a surge in virtual renting, creating vulnerabilities that scammers are quick to capitalize on.

  • Proliferation of fraud tools: A quick Google search returns established businesses that sell fake documents, including bank statements and pay stubs.

  • Economic desperation: With higher rent and stagnant income, renter desperation can further fuel fraudulent practices.

  • Eviction moratoriums: Covid-era eviction moratoriums have inadvertently created opportunities for fraudulent renters to exploit the system.

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