It’s organized crime targeting their apartment communities
Fraud Persists Across Multifamily as AI-Fueled Schemes Evolve
In the first half of 2026, Snappt evaluated over 700,000 rental lease applicants, more submissions than ever before, and found 3.8%, or roughly 1 in every 26, containing fraud.
“This is our largest data set in company history. We’re spanning over 2.5 million units now on the platform, so fairly sizable coverage. What this report is showing is that fraud is still very much happening in multifamily,” says Kyle Nelson, chief business officer at applicant trust platform Snappt. “Overall, we are seeing new entrants in terms of fraudulent activity, new types of fraud, as well as new areas where fraud is happening.”
Among the major metros in Snappt’s midyear report, fraud rates were highest in the Sun Belt. Atlanta led the nation’s high-volume markets, with nearly 1 in 18 submissions altered. Las Vegas, Houston, Miami, and Dallas-Fort Worth rounded out the top five. Not far behind were Philadelphia; Los Angeles; Richmond, Virginia; Jacksonville, Florida; and New York. According to Snappt, fraud rates ranged from under 2% to 9%, a spread that shows different risks based on ZIP codes.
“As I look at it a little bit closer, I think the geographic density of it is what’s most alarming. Fraud is a local problem. What’s happening in areas like Memphis, Tennessee, or Dallas might not be the same in Duluth, Minnesota, or St. Louis. But that said, I do believe that fraud is now a national problem, too,” notes Nelson.
For example, while Dallas and Atlanta have seen fraudulent activity for years, Nelson says Snappt is now seeing it in markets where there hasn’t been fraud historically. Chicago is one example where organized fraud ring activities are starting to pick up.
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In addition, the biggest markets don’t tell the full story. Memphis had the highest rate of any qualifying metro, with nearly 1 in 11 submissions altered. Detroit had the highest rate in the Midwest at 6%, roughly 1.6 times the national average. Vallejo, California, came in at 6.1%, with Snappt citing the affordability issues in the Bay Area pushing fraud to the market’s outer edges. In addition, Georgia’s Macon County had a 5.6% rate, which shows how fraud pressure is extending beyond the hot spot of Atlanta.
“Fraud follows the path of least resistance,” says Nelson, sharing that applicants looking to submit fraudulent documents are learning which communities verify and which do not. In addition, he says operators need to be aware that it’s not just one person editing a document. It’s organized crime targeting their apartment communities.
“Operators need to fight fire with fire. The bad guys are using artificial intelligence (AI) at mass now, and so using basic or human verification is no longer good enough. You need to be leveraging AI-powered tools in order to combat these AI-generated documents,” he shares. “If you don’t have some type of advanced applicant trust platform that’s leveraging best-in-class AI that’s been trained on over 20 million documents, then you are leaving yourself vulnerable to these sorts of threats. And the volume of AI-generated documents is only ticking up. Anyone using Gemini or Chat GPT or any of these tools can create at their fingertips a fake pay stub or fake documents.”
According to Nelson, one fallacy around fraud is that it only occurs in documents uploaded during the leasing process, with many operators relying on connected verification for banking or payroll.
“There’s still fraud in connected accounts. We’ve been proving it for years with regards to inception fraud and fake payroll, and we’ve been working with many different payroll providers on malicious companies that have infiltrated their systems for nefarious purposes. So the whole concept that a bank account can’t be fake or there can’t be a fake company in ADP is completely a false narrative,” he shares.
Nelson adds the other side of that is Snappt is still seeing the majority of rental applicants provide documents during the application process because their payroll isn’t supported, they are underbanked, or they just don’t feel comfortable.
“We need to provide them a route to provide those documents. The ideology of not allowing an applicant to upload documents to prevent fraud is completely bogus,” he says.
Nelson also notes that the worst thing an operator can do is nothing.
“Do something. If you’re not sure what your AI-powered fraud-fighting strategy is, take a baby step. Start running ID verification. There are tons of tools out there. They’re low cost. If you prevent one eviction through the course of a year, often times you’re paying for these platforms three to four times over,” he says. “Become educated on the problem, and you’ll arrive at whatever solution is right for your business. I think that’s what’s most important.”
Nelson reminds that 96% of applicants are good.
“We need to provide that 96% cohort the opportunity to get through safe, efficiently, and in a frictionless manner, so that that’s our guiding principle at Snappt. Stopping fraud is a huge, huge part of what we do. But we need to lead with positive intent, and we need to solve the problem, which is how do we make verification easy for everyone. That’s our core ethos,” he adds.
Source: Multifamily Executive
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