Not Just A Champagne Problem: Why The Rise Of Leasing Application Fraud Is Bad For Regular Renters
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Florida-based property management director Jared Decker got a phone call in 2023 that made his professional life a living nightmare. A scammer had rented a home in the company's portfolio under an assumed identity, he learned, and had been living there for months, he told Business Insider.
It took several weeks and lengthy court proceedings to get the scammer evicted, and in the end, Coastal Pioneer Management, the mom-and-pop rental company Decker works for, was on the hook for much of the financial fallout.
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Now, with that episode in his rearview mirror, Decker is joining hundreds of other landlords and property managers nationwide as they raise the alarm about a surge in leasing application fraud.
“Five to seven years ago, fraud was, I don’t want to say nonexistent, but it was less of a factor,” Chase Harrington, president and COO of property management software company Entrata, told BI. "We’ve seen progress over time [of] truly bad actors, of like, ‘Are they who they say they are?'”
Leasing application fraud tends to take two forms, experts tell BI. There's "first-party fraud" where tenants use their real identities but doctor things like pay stubs or credit reports to increase their odds of qualifying financially. The other type, according to BI, is called "third-party fraud." This variety, which Decker and his firm experienced, involves scammers stealing another person's identity wholesale.
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Leasing fraud appears to be a fairly widespread issue. According to a 2024 study by RealPage and Dimensional Research that looked at 400 property managers in the country's largest metros, 75% of them reported experiencing an increase in fraudulent applications.
Property managers haven't been able to identify any singular factors like location, type of unit, or local tenant laws that make a place more susceptible to leasing application fraud. However, they do agree that certain conditions, like the leasing process moving largely online and the increased sophistication of AI, have made it easier for scammers to work.
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