THE COST OF FRAUDULENT APPLICANTS
The vast majority of respondents (70.7%) to the Pulse Survey reported experiencing an increase in fraudulent applications and payments in the previous twelve months. Respondents to NMHC’s Pulse Survey were required to write off an average of nearly $4.2 million in bad debt over the prior 12 months. Responders reported that approximately one quarter (24.5%) of this bad debt, on average, could be attributed to nonpayment of rent due to fraudulent applications. Fraudulent applications can result in unpaid rent, legal fees associated with evictions, and potential damage to a property owner's reputation. Unfortunately, the NMHC survey found that nearly a quarter of eviction filings (23.8%) stemmed from falsified rental submissions. Thankfully, there are ways to combat these deceptions, particularly by utilizing AAOA tenant background screening combined with
artificial intelligence (AI). Landlords can access comprehensive applicant screening, including tenant credit checks, Social Security number verification, criminal background checks, rental history, employment verification and more with AAOA screening services. Briefly, AI is a technology that allows computers to perform tasks typically requiring human intelligence, such as learning, reasoning, and problem-solving. It's an impersonation of human cognitive functions, but built on algorithms, data analysis, and computational power. AI property management software can generate document submissions, rent reminders, rent collections and take care of the scheduling of maintenance requests. Landlords are increasingly turning to this technology to mitigate risk and ensure they are choosing reliable tenants. By using AI to perform these tasks, human delays and errors can be prevented.
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