Digital tools have dramatically changed the landscape
Multifamily Owners Face Rising Threat From Sophisticated Fraud
Fraud has long plagued the multifamily sector, but the scope and sophistication of the problem are now reaching new levels, fueled by technology and shifting consumer expectations. That convergence was the focus of a recent Snappt podcast, where industry leaders discussed how owners, developers, and operators are increasingly being forced to contend with both the evolving nature of bad actors and the rising demand for speed and convenience in apartment leasing.
While fraud once often meant little more than tenants skipping out on rent payments, digital tools have dramatically changed the landscape. Today, it is easier than ever to alter financial documents—everything from work histories to pay stubs and bank deposit slips—using free editing software or, increasingly, artificial intelligence.
Kyle Nelson, vice president of corporate strategy at Snappt, explained one such tactic. “I’ve modified the document,” he said. “There’s fictitious deposit history, but I’m applying as myself. I think what we’re seeing now more and more is this.”
The problem is not limited to individuals trying to manipulate their way into a unit. According to Nelson, organized criminal networks are scaling the issue. “We’re seeing fraud as a service,” he said, describing enterprises that create sham companies, embed themselves into legitimate payment systems, and then sell documents to those looking to misrepresent themselves.
“It’s real crime. It’s federal wire fraud. This is not just an 18-year-old behind a laptop. This is big businesses that are now on the dark web and social forums like TikTok and Reddit, and that are selling identities and these packages to gain access to apartments and homes, maliciously.”
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Adding to the complexity are modern consumer expectations, which continue to compress leasing timelines. Sara Hinson, director of systems at AOG Living, said the pressure to deliver instant results without sacrificing security poses particular challenges.
“It used to be that our expectation or the prospects’ expectation was, hey, we could turn it around in five business days, and we could,” she said. “Then it was like, ‘Hey, we need to do it under 72 hours.’ Now in the world of Amazon, everybody wants it instantaneously. I can order it online and then get it delivered by this afternoon.”
Prospective renters are equally part of this equation. Hinson noted that applicants increasingly expect clarity and fairness throughout the screening process, while also wanting the assurance that their communities are free from fraudulent actors. “They want to understand where they’re at in the application process,” she said.
“They want to make sure that they’re being treated fairly and equally during their application process, and they want to live in a community where they are being screened correctly, and they’re not surrounded by these more industrial fraudsters.”
Source: GlobeSt.
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