Fraud doesn’t take a holiday break, even if you and your residents do. 

For many property managers, the holidays are a time to take a break from a demanding job as leasing activity slows. Unfortunately, fraudsters don’t go on vacation.

According to the FBI, the holidays are one of the busiest times of year for scammers, whose deceptions can snare both apartment companies and residents with any number of online and offline ruses.

The bureau reports that its annual volume of complaints spikes in the early months of the year, as victims become aware of the fraud that was perpetrated on them over the holidays.

The costs are staggering. The agency’s 2021 Internet Crime Report tallied more than $500 million in losses due to the types of fraud that are most common at this time of year. Meanwhile, AARP’s Holiday Scams Reportfound that 75% of Americans were targeted or victimized by fraud, scams and theft.

For multifamily operators, the rise in holiday fraud compounds the issue of rental application fraud which became a year-round scourge in the industry during the pandemic.

While a slowdown in leasing during the holidays may offer a temporary respite from apartment application scams, others are waiting for property managers just outside – and in some cases, within – their front doors.

Social media shopping scams

One of the most prevalent areas of holiday fraud comes in the form of online shopping scams, typically from social media ads that refer shoppers to fake online shops or require users to input personal information, which is then stolen.

Phishing link scams are also common, where cybercriminals send malicious URLs to social media users. When a user clicks on them, they either steal personal information or infect that person’s device with malware that can pose a continuing threat throughout the year. According to Nord Security subsidiary Atlas VPN, nearly 50% of social media users have been victims of online shopping scams.

And while a widespread perception holds that older adults fall victim to these kinds of schemes more often than younger, internet-savvy users,  that’s not true, according to AARP.

Indeed, in the 18- to 34-year-old demographic – many operators’ largest cohort of renters – more than 81% of respondents had fallen victim to fraud, compared to 69% of adults aged 65-plus.

That means your residents could be especially prone to these scams, and their resulting impacts, which can wreak havoc on an individual’s financial life when they lead to identity theft. The repercussions for property managers come when residents experience financial turmoil in the new year and struggle to pay rent.

Help residents avoid becoming victims of these crimes with alerts on your resident portal, as well as signage and preventative language in other resident communications.  Visit the FBI’s online resources to get started.

Gift cards

Another big target for holiday scammers comes in the form of retailer gift cards, which nearly two-thirds of shoppers plan to buy or give this year.

Gift card scams come in two main flavors. The first is purchase scams, where fraudsters offer fake gift cards for sale or ask you to pay with gift cards online, but then don’t send an item in return.

The second instance is more troubling. It arises when fraudsters tamper with gift cards on physical retail racks, a type of scam Consumer Reports says has been common for years.  

In this ploy, fraudsters record a card’s account number and expose and re-cover the pin before placing it back on the rack. Then, they set an online trap so that as soon as the card is activated, its funds are automatically drained. The problem is, neither the buyer nor recipient knows this happens until they attempt to use it – indeed, 21% of Americans report they have either given or received gift cards with a $0 balance, according to AARP.

For property operators, who often give residents gift cards during the holidays as a special year-end thank you, being a victim of this type of fraud is not only embarrassing, it can cause ill-will from residents who have already been pushed to their financial and emotional limits by the rise in rents during the pandemic.

Who wouldn’t be miffed by getting a $5 or $10 Starbucks gift card from a property management company they’ve paid thousands of dollars to in the previous year, only to find out the card is empty?

The solution, fraud prevention experts say, is to ensure that you only buy gift cards from retailers’ official online sites and then make sure they are kept in a secure place before distributing them to tenants.

Package theft

One of the hallmarks of modern apartment life during the holidays is the overflowing package room.

As online commerce has skyrocketed, apartment community infrastructure just hasn’t been able to keep up with the deluge of boxes that come through the door each December.

Invariably, that means packages getting left in a common area or sometimes in front of an individual resident’s door. These packages, of course, are susceptible to theft by scammers who can easily enter the lobby during business hours or even other residents who lack holiday goodwill toward their neighbors.

Indeed, more than a quarter of all Americans report packages being stolen.    

At multifamily properties, a go-to solution has been package lockers with individual codes that are texted to residents when a new delivery arrives. But even these amenities get overwhelmed during the holidays, and the overflow tends to go wherever property staff can find room for it.

One way around this conundrum is to enable in-unit deliveries at a property by employing the technology of smart locks and a resident portal that allows renters to opt-in to having staff enter their homes.

“In-unit deliveries could be the answer for many properties and residents,” Robert Gaulden, director of multifamily channel strategy at Allegion, tells Multifamily Executive.

But he cautions residents must be comfortable with delivery service or property management teams having access or entering their units to deliver packages. “Adoption of in-unit delivery is tightly coupled to trust,” Gaulden says.

Spoofed listings

With the rise of short-term rentals, many holiday travelers have become accustomed to selecting a unit online and showing up with the expectation that the keys or a code will be available to get them in the door.

But the simultaneous increase of spoofed rental listings means multifamily operators may unwittingly be playing a role in a fraudster’s deceit. This happens when content is copied from a legitimate apartment firm’s website and reposted to take reservations—and the accompanying fees—on a bogus site.

The Better Business Bureau says these types of rental ploys are on the rise, with fraudsters posting on recognizable third-party sites like VRBO or Airbnb.

Indeed, the National Multifamily Housing Council’s Sarah Yaussi told Multifamily Executive that spoofers’ efforts in this area have become increasingly sophisticated, with professional-looking listings that are free from the typical misspellings and awkward English of easy-to-spot scams.

One way to combat this trend is to set up a Google alert with your property’s name to flag any unauthorized listings. Doing so can also help with a community’s reputation management when unfavorable reviews generate negative posts online, giving operators a chance to respond and intervene.   

While property managers should take a break during the holidays to enjoy some hard-earned downtime, they also need to remember scammers don’t go on vacation. Knowing where these scams show up and taking simple steps to avoid them can help property managers – and their residents – experience more holiday cheer, and less year-end fraud.