As selling prices of homes accelerated throughout the pandemic, more and more buyers were priced out of the market and forced to become renters. Unsurprisingly, the number of new renters joined the number of renters already in the marketplace to create a demand for homes that far exceeded the supply available. And when demand exceeds supply, prices increase. For the first time, apartment seekers were entering into bidding wars and even lining up for hours waiting for leasing offices to open. It seemed that price did not matter—whether they could afford it or not. Application Fraud Grows as Rents Increase
How lack of inventory breeds dishonesty When rents increased beyond the amount people could pay for a home, many turned to illegal methods in order to qualify for a place to live. According to Daniel Berlind, CEO of Snappt, about 11 million fraudulent rental applications were submitted last year in the U.S. The fraud detection company also notes that one in eight financial documents had been altered out of the more than 1 million it scanned.
Additionally, between 2019 and 2021, reports of fraud, identity theft and other deceptions spiked 67% in the U.S., according to the Federal Trade Commission. In a 2020 analysis, LexisNexis found more than 30,000 fraud rings who were involved in forgery, filing false claims, identity theft, identity manipulation and fake bank checks.
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