AI emerges as both a tool for fraud detection and a new risk factor as rental scams evolve.
Snappt Report: 6.4% of Rental Applications Were Fraudulent in 2024
After analyzing nearly 5 million documents in 2024, Snappt, a leader in fraud detection for multifamily property management, found that 6.4% of rental applications were fraudulent with over 80,000 documents manipulated.
According to Snappt in its “2024 Fraud Report: Data, Trends, and Strategies for 2025,” artificial intelligence (AI) will play a key role in streamlining operations while also providing bad actors with new ways to manipulate documents.
“As fraud continues to evolve in 2025, leveraging best-in-class document fraud detection and income verification technology is the only way to catch these bad actors before they result in financial losses,” said Snappt CEO Daniel Berlind.
The average fraud rate last year decreased from 7.9% in 2023 and can be attributed to several key factors, according to Snappt, including improvements in fraud prevention and detection strategies.
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Memphis held the No. 1 spot for metro areas with the highest fraud rates last year, with a 14.4% rate compared with 14.7% in 2023. Mobile, Alabama, with a fraud rate of 13.5% comes in second, followed by Atlanta, 12.2%; Jackson, Mississippi, 11%; and Houston, 10.9%.
Mississippi, which didn’t make the top 10 states with the highest fraud list in 2023, took the top spot with 10.3%. Georgia, 7.9%; Indiana, 7.8%; Texas, 7.8%; and Maryland, 7.6%, round out the top five. Nevada, 7.5%; Wisconsin, 6.9%; Arkansas, 6.9%; Washington, D.C., 6.6%; and Alabama, 6.6%, fill out the rest of the top 10.
The report also highlighted the top three methods used by fraudsters last year:
- Fraudulent PDF creators: Using specialized software to create fake documents, such as bank statements and pay stubs, that appear legitimate;
- Text insertion: Editing existing documents to falsify information, such as inflating incomes and changing employment details; and
- Font fail: Using mismatched fonts or poorly aligned text during alterations, leaving subtle yet detectable forgery signs.
Source: Multifamily Executive
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