Apartment application fraud is on the rise, according to a survey by Snappt, an AI-enabled fraud detection platform. Eighty-five percent of apartment managers report being targeted by fraudsters, compared to 66% before the pandemic. Falsified applications leading to negative outcomes can cost thousands of dollars per door in bad debt and avoidable eviction expenses. Institutional property managers surveyed characterized falsified documentation as a “somewhat or extremely significant challenge.” They said staff spend the most screening time verifying bank statements (72%) and pay stubs (67%). Property managers can fight application fraud by following these four steps:
- If reviewing financial information, request multiple months of pay stubs or bank statements. When applicants aren’t able to provide such information, consider asking for other reasonable information that will allow you to protect against potential fraud.
- Look for inconsistencies between when an employment pay stub was issued and when the deposit reached the applicant’s account. Weekends and holidays can shift deposits by one or two days, but this rarely happens in consecutive months.
- If reviewing employment information, consider calling employers to confirm that applicants work where they claim. Use the number listed on employers’ websites.
- Incentivize your team to carefully review applications by tying future bonuses to a property’s on-time rent payment score.
Culture is created in the spaces between work, before and after meetings when you’re asking how kids are doing, how parents are doing."
-Marko Stankovic, vice president, marketing, Virbela, speaking at C5 Summit.