As a leader in application fraud detection for residential apartment property managers, Snappt has released its 2022 State of Apartment Tenant Screening Survey. The company has scanned over 1 million financial documents and has found that one in eight have been fraudulently altered. The survey finds that 85% of property managers think consumers are increasingly becoming more comfortable with application fraud.
“Application fraud is more prevalent than you would think, especially in a world of online applications,” says Daniel Berlind, CEO of Snappt. “We estimate 11 million fraudulent applications were submitted last year in the U.S. alone.”
Largely related to the pandemic, property managers have seen a rise in fraud. Tenants can alter pay stubs or bank statements easily to better their financials, which can result in eventual evictions if not caught. Every year, 3.7 million residential evictions are filed costing property managers an average of $7,500 each. As the single highest expense faced, the need for screening is vital.
The survey reveals that the most common goals for application screening include making sure applicants have the financial resources to pay rent; avoiding evictions; reducing criminal activity; avoiding disruptive tenants; and avoiding property damage. “The amount of fraud that has come through lately has tripled, and we have to carefully, with a fine-tooth comb, review everyone’s check stubs,” says one property manager in Texas.
Regarding financial fraud, the most common problems faced in today’s market are rent-related issues from late payments to paying less than the full amount to not paying at all. Damaged property, disruptive tenants, criminal activity, and tenants abandoning properties are also major problems. These issues have been heightened by the increased adoption of proptech during the pandemic and the ease of creating fake documents.
Property managers reported that the most crucial elements of applicant screening they use to overcome the issue include verifying the accuracy of identification, pay stubs and bank statements, which can be time consuming. A credit check and prior evictions check also help in the process.
The report also includes a list of top strategic tips property managers can take to detect fraud and decrease evictions.