Make Rental Fraud Prevention a Priority by Removing 3 Common Barriers

Rental fraud is on the rise, impacting the residents, reputation and workflows of multifamily businesses. In addition, it has impacted overall financial results by more than 10%, according to one of the industry’s largest fraud studies.

As discouraging as that stat may be, the good news is you can prioritize rental fraud prevention by removing three common barriers – no effective way to measure fraud, no team buy-in, and no easy and consistent fraud prevention process.

3 common barriers impeding fraud prevention

Can you identify with any of these?

Barrier #1: Insufficient tracking of fraud metrics

Fewer than 1 in 4 (22%) of study participants have formal metrics for tracking rental fraud and its business impact

– 2024 National Multifamily Fraud Research Study

If companies rely on informal methods of tracking rental fraud – or worse, don’t track it at all – they’re missing critical metrics. What doesn’t get measured doesn’t improve, so businesses can’t identify the true impacts of fraud for all their properties when they aren’t tracking important fraud prevention KPIs.

Barrier #2: Employees not trained to combat fraud

If leasing teams push through unqualified prospects, they may be filling vacant units with potential fraudsters. When onsite staff aren’t bought in on prevention, they aren’t motivated to look for and report signs of rental fraud.

Barrier #3: Inconsistent & complicated fraud reduction processes

87% of study participants report applicants find processes for reducing fraud tedious and frustrating, while 86% report application reviewers find it tedious and frustrating.

– 2024 National Multifamily Fraud Research Study

If a current validation solution isn’t doing what it should do, it’s probably using ineffective methods. When a company sees inconsistent processes and standards for each property or loses qualified prospects because of complicated verification processes, its anti-fraud technology needs reevaluating.

Read on to see what you can do to dismantle these barriers and prioritize fraud prevention.

How to remove barriers & improve fraud prevention

Here’s what you can do to stay ahead of rising leasing fraud.

Solution #1: Track the data that counts               

The more you know about fraud, the better, and that includes the insights derived from high-quality data that decision-makers count on to set portfolio-wide goals. Metrics to track include:

• Evictions and skips attributed to fraudulent applications
• Costs for evictions and uncollected rent and other charges
• Related costs like property damage and churn from criminal activities
• Number of declined applications

Solution #2: Train staff to identify and prioritize rental fraud

With fraud benchmarks and metrics established, it’s time to train and roll out to the entire portfolio. Consider holding brown bag lunches where:

• Teams discuss rental application fraud trends
• Teams brainstorm ways to prioritize decreasing fraud so these new benchmarks improve
• An industry expert is brought in to speak to your teams about these trends
• A competition is put together for communities to win prizes for improving the new fraud benchmarks

Solution #3: Reduce fraud through advanced technology

An AI-powered tech approach to rental fraud prevention eliminates manual methods of tracking verification, speeds up the prequalification process with faster and better income and identify verification, and can improve overall financial results.

Tackle rental fraud head-on

The growing complexity of fraud challenges means real estate property owners and operators need to look for more effective and efficient ways to combat organized and sophisticated fraudsters. And what you have today may not meet your future needs when it comes to measuring fraud, getting employees on board and leveraging advanced technology.

Break down the barriers and start prioritizing fraud prevention improvement at your company.

To learn more, visit Prequalification Solutions.