RENT Magazine Q4 '22

Fraud, the pandemic and social distancing Since people were encouraged to isolate themselves from others during the Covid-19 pandemic, landlords began to allow applicants to send an application online without ever meeting face-to-face. Digital interactions became increasingly popular between landlords and tenants, especially in urban centers where virtual communication is often preferred. While the digital age offers many benefits, such as larger applicant pools and easier communication, it has opened the door to more fraudulent applications. It is well-documented that fraudsters found numerous ways to exploit the vulnerable. When so many Americans were laid off, unemployed or furloughed, fraud reached a high of 15% compared to 10.3% over the same period in 2019. Transunion noticed that fraud steadily increased over the course of the pandemic and 22% of applicants failed authentication or were identified as fiscally high risk. FRAUD STEADILY INCREASED OVER THE COURSE OF THE PANDEMIC AND 22% OF APPLICANTS FAILED AUTHENTICATION OR WERE IDENTIFIED AS FISCALLY HIGH RISK.

What are the most common types of application fraud? Consumer credit reporting company Experian notes that application fraud tends to fall into two categories: deception intended to improve the tenant’s perceived ability to pay rent and deception intended to hide evidence of past mismanagement of their finances. The company also points out that “even the most basic home computer can provide ample functionality to capture and re-use digital images or to scan and edit documents. As software continues to emphasize ease of use, more and more tenants will be able to engage in this type of behavior.” People with a questionable financial history are inclined to manipulate their identities in the hope that the altered information won’t be matched to their negative history. Given digital tools such as photo editing software and document editing packages which can scan and then reproduce a fake version, misrepresentation is easier than it seems. It’s not hard for a person to doctor a paystub or bank statement or buy counterfeit ones online. When these renters move into apartments and can’t pay, it can eventually lead to eviction.

PAGE 7