What We Can Do About Fraud
Why the Industry’s Fight Against Fraud Is Failing
The multifamily industry is locked in a costly battle against rental fraud. Despite widespread adoption of application screening tools and document checks, fraudsters are not only keeping up—they’re pulling ahead. The numbers are sobering: sophisticated scams cost communities hundreds of thousands of dollars annually, and new technology is making it easier than ever for bad actors to slip through the cracks.
The Problem: Application-Point Verification Isn’t Enough
Most operators focus their fraud prevention efforts at the point of application. On paper, this makes sense: verify documents, check references, and screen applicants before a lease is signed. But the reality is, this approach is no longer effective. Here’s why:
- Fake Documents Are Nearly Undetectable: Fraudsters use advanced software and AI to create pay stubs, bank statements, and even IDs that look legitimate—even to trained eyes.
- Synthetic Identities Are on the Rise: Scammers now blend real and fake information to create entirely new, undetectable personas that pass traditional screenings.
- Fraud Rings Target Weak Spots: Organized groups systematically apply at multiple properties, using different names and documents to test for vulnerabilities.
Timing Works Against You: By the time fraud is detected at the application stage, bad actors may have already gained access to your property, putting your team, residents, and reputation at risk.
The Real Risk: Safety and Security
When fraudsters make it through the application process, the consequences go far beyond unpaid rent. Properties face:
- Increased turnover and vacancy loss
- Legal and eviction costs
- Potential threats to staff and resident safety
- Reputational damage that can impact future leasing
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The Solution: Verify at the Time of Tour
To stay ahead, multifamily operators must shift their focus from verifying after the fact to verifying before anyone ever sets foot on-site. The most effective way to do this is through ID verification at the time of tour.
Why Tour-Time Verification Works
- Prevents Fraud Before It Enters Your Doors: By requiring a government-issued ID and verifying it before or during the tour, you ensure that prospective renters are who they claim to be—stopping synthetic identities and document forgeries in their tracks.
- Protects Your Team and Community: Verifying identity before access ensures the safety of leasing staff and prevents unauthorized individuals from entering your property. No more throwing prospects’ IDs in the drawer before a tour.
- Deters Fraudsters: Bad actors are far less likely to target properties with robust, up-front identity checks, reducing your risk profile.
- Builds Trust with Legitimate Renters: Prospects appreciate a community that values security and professionalism.
What the Industry Must Do Next
Fraud is evolving, and so must our defenses. Relying solely on application-point verification is a losing strategy in today’s environment. Instead, multifamily operators should:
- Adopt tour-time ID verification as a standard practice
- Educate staff on the latest fraud tactics and prevention tools
- Invest in technology that can spot synthetic identities and fake documents in real-time
Conclusion
The industry’s current approach is failing because it’s fighting today’s battles with yesterday’s tools. By moving verification to the time of tour and leveraging advanced ID technology, multifamily operators can finally get ahead of fraud—protecting their properties, their teams, and their bottom line.
Fraudsters are getting smarter. It’s time our solutions do, too.
Source: Multifamily Insiders
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