Concerns over rental fraud spike during pandemic
Fraud triggers increased 30% between March and August, a new report shows
Signs that fraud might be on the rise are popping up in the rental housing market, according to a new analysis.
Fraud triggers – defined as applicant statuses with failed authentication and/or identified as high risk – reached a high of 15.2% in August, according to a report from credit reporting agency TransUnion.
That marks a nearly 30% increase from March through August, as many families were financially struggling through the effects of the coronavirus pandemic.
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“Fraud continues to be an increasingly concerning issue in the multifamily industry for the last several years and the COVID-19 pandemic driven shift to virtual leasing has pushed this concern to the forefront for property managers,” Maitri Johnson, vice president of TransUnion’s tenant and employment business, said in a statement.
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A subsequent study conducted among multifamily housing executives by TransUnion found that the frequency of fraud incidents had increased by nearly 50% since the pandemic began – and many were not able to identify the fraudsters until after the applicant move-in.
The industry cited numerous negative consequences that a rise in fraud has wrought, including spending more time reviewing applications, increasing bad debt, increasing evictions and financial losses.