Rental application fraud has grown significantly since the COVID-19 crisis began, according to new data from real estate technology and fraud detection company Snappt.
The company’s latest report shows that application fraud has increased by 9% month-over-month since the pandemic began, with many inflating their income to qualify for rentals, or else disguising the source of their income. According to Snappt, the increased fraud is likely due to the dire economic climate. Recent changes to local and state eviction moratoriums may also have had an impact, Snappt said.
“There are a number of factors that are fueling the increase in fraudulent rental applications,” said Daniel Berlind, CEO and co-founder of Snappt. “The increasing number of self-employed applicants, a move to online rental applications, and the increasing availability of tools to fraudulently alter financial documentation all make the problem more common.”
Snappt’s report notes that 66% of property managers it surveyed have fallen victim to fraudulent rental applications. The problem is real, with property managers citing the extra costs they face from having to evict bad tenants as one of the major associated problems. On average, it costs around $7,685 to evict a bad tenant, Snappt said.
Fraudulent applications also tend to lead to greater physical damage to rental properties, criminal activity, and loss of reputation. In addition, landlords report missing out on good tenants due to fraudulent activity.
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