Fraud attempts across industries in the US are up an average of 25% this year, and according to a recent study conducted by Entrata, the property management industry is feeling the impact of this rise in fraudulent activity. The survey findings reveal rapid growth in the number of fraud attempts and increased concern about the impact these cases are having on operations. The results provide a unique view into the types of fraud plaguing the industry, the frequency of such attempts, and shed light on ways new technology may help combat these issues.
Experts are seeing a rise in various types of fraud over the last 18 months due in large part to the COVID-19 pandemic, and Entrata found that 33% of the property management professionals surveyed are “very concerned” about fraud right now. Results also showed that nearly two-thirds (65%) of respondents are “not confident” in the fraud prevention tools they currently have in place. These sentiments are particularly alarming considering that Entrata data reveals a 111% increase in fraudulent activity from 2019 to 2020. As fraud attempts continue to rise and the sophistication of these efforts evolve, access to effective and comprehensive fraud protection resources is critical for property managers.
Despite the fact that one of the most common issues facing property managers is payment fraud, survey findings revealed that a surprising 64% of communities are not currently using a payment verification tool. This may be contributing to the fact that more than a quarter (28%) of respondents experience five or more returned payments each month.
Properties also encounter a growing number of attempts by renters to apply for leases using fraudulent information. For example, most (63%) report an increasing number of fake pay stubs submitted during the income verification process. And failure to identify this fraud may contribute to the reason many (57%) report a greater number of payments with insufficient funds when rent is due. These trends show that tools designed to prevent fraudulent applications and payment returns are more important than ever to keep property operations running smoothly.
As fraud attempts continue to grow and evolve, so do the comprehensive software solutions designed to help mitigate these challenges at apartment communities. Automated screening platforms, payment verification services, and other specialized products can help ensure properties are protected as they guide residents through the renter journey.