We recently conducted a survey of 100 property managers across the U.S.  What we found is incredibly alarming.

COVID-19 is having an intense effect on tenants and landlords alike.  Just look at AAOA’s recent survey that found more than HALF of landlords have tenants who are now unable to pay rent due to COVID-19. We see it too—we’ve seen a 9% increase in applicants fraudulently changing financial documents since COVID-19 struck.

The survey found the following:

#1. It is Widespread.

41 percent told us fraudulently-altered financial documentation is “somewhat to extremely” commonplace.  In fact, two-thirds have fallen victim to this kind of fraud. Worse yet, 59 percent see the problem staying steady or even getting worse.

#2. It Leads to Expensive Evictions.

Let’s take a property manager responsible for a 250-unit property. At an eviction rate of 12 percent, that’s 30 evictions per year at the cost of $230,550. The 15 percent of those coming from fraudulently-altered documentation represents $34,583 per year!

In conclusion, 15 percent of all evictions are caused by this type of fraud, according to respondents. That’s a costly problem! The average cost per eviction among those surveyed is $7,685. They also report an annual eviction rate of 12 percent. 

#3. Factors Driving Application Fraud have Amplified.

The top issues they listed were:

·       The growing number of self-employed applicants

·       These same tools are getting much better

·       Compliance regulations restrict property managers’ ability to trust their gut

·       Increase in online applications

·       Tools used to alter financial documents are growing in number

#4. It Causes Major Headaches for Property Managers.

The top issues they listed were:

·       Criminal activity at the property

·       Loss of reputation

·       Eviction costs

·       Damages to the property

So whats next? How can property managers do even more to spot fakes? By adding more tamper-proof tactics into their tool kit.

How can you ensure files have not been altered? Continue reconnaissance, lots of it. Examine paperwork, contact issuing organizations and visit sites to verify income totals and other data. Thorough investigation will uncover inconsistencies or lies and has served as the only traditional recourse to check files. In this endeavor, you may boost your find rate with a few extra tactics.

Take notice of visual clues

Does the document look new? Or, does it appear to have been copied multiple times? Original documents should be legible and all rows and columns should be aligned. Check that transactional details and other numbers also match formatting in verified documents you’ve received from the same source in the past.

Follow the numbers

Do the math to ensure claimed income totals the same amount printed on pay stubs or other financial documents. Also, call all the telephone numbers on a document to confirm they reach the stated contact such as a prior employer, rather than an accomplice in crime. Even better, look up contact information for issuing organizations or corporate HR departments yourself; then, ask for specific details such as a start-date, information a friend would be unlikely to know.

Click through all of the links

Question any inconsistencies or dead links for live documents. Conduct your own research online: Peruse LinkedIn pages and confirm company legitimacy through online databases such as sba.gov or opencorporates.com.

In conclusion, fraudulently Altered Financial Documentation is Hard to Spot! Most (58 percent) say spotting such tenant fraud manually is “somewhat to extremely” challenging.  Half also remarked that it takes too long to do manually.