A new report shows why it’s more important than ever for property owners and operators to equip themselves with the knowledge and tools needed to address fraudsters head-on.

Rental fraud remains a significant challenge for the multifamily housing industry, costing property owners millions in potential losses. In fact, 60% of property managers have fallen victim to fraud in the last two years — with altered documentation being the primary challenge for 84% of respondents, according to a recent TransUnion survey. 

Yet, just over half (51%) of property owners are using fraud detection tools, according to Snappt's 2024 State of Applicant Fraud Report: Data, Trends, and Strategies for 2025. The report highlights the latest trends in fraudulent rental applications and offers best practices for property managers, decision-makers, and leasing agents to protect against the rising tide of malfeasance they face.

Rising and emerging fraud threats

When asked about the most surprising finding in the Fraud Report, Kyle Nelson, Snappt’s Vice President of Corporate Strategy, noted, “We discovered that fraudsters are using a wider array of tactics to get into properties.”

The report shows bad actors are particularly active from January through March and during the middle of the week. Fraudsters’ top three tactics were: 

• Fraudulent PDF Creators: leveraging specialized software to create fake documents that appear legitimate.

• Font Fail: using mismatched fonts or poorly aligned text during document alterations, which leaves subtle yet detectable signs of forgery.

• Text Insertion: editing existing documents to falsify information, such as inflating income or changing employment details.

In the face of these increasingly sophisticated methods, property managers may have a false sense of security from traditional background and credit screening. “They say, ‘Oh, I have a screening that shows good credit, and no criminal background, and no previous eviction filings. I’m good, right?’ And that couldn’t be further from the truth,” Nelson warned.

In addition to first-party fraud, where a renter falsifies their own income or other information, property managers face a new danger called “synthetic identity fraud.” This type of fraud is when a fictitious identity is created by using stolen and fake information.

“Synthetic identity fraud is scary for operators because it’s much harder to combat,” Nelson said. “A falsified credit privacy number, used in place of Social Security numbers, can pass traditional background checks all day long.”

Fraudsters also use AI to generate bogus documents. That’s why companies like Snappt are using AI-powered fraud detection to stay one step ahead. “We have advanced our technology stack to make it that much harder for the bad guys to slip through,” Nelson noted.

A multi-layer approach to fighting fraud

Currently, a fraud forensics team — using investigative tools and sophisticated checks — is needed to identify criminals. 

“Bad actors are infiltrating payroll systems and setting up fictitious companies to conduct malicious activity,” Nelson stated. “Our fraud forensics team uses a multi-layer approach to detect pay stubs that are not from a valid entity. We ensure that different elements of income and identity go through checks to prove the source is authentic. The operator needs to know that the person sitting across from him is who he says he is.”

Ultimately, a property manager needs a comprehensive, multi-layer approach to combat rental fraud, which includes:

1. Document Fraud Detection: analyzing a document’s metadata to check for edits, manipulations, or forgeries.

2. ID Verification: confirming an applicant is who they say they are through numerous ID checks and biometric live scans.

3. Income Verification: using different methods of income verification and calculation to determine and calculate an applicant’s income. 

4. Connected Payroll: giving the applicant the option to connect their payroll provider to make verifying income and employment information easier.

5. Inception Fraud Check: maintaining and checking against a list of companies and LLCs that conduct inception fraud to catch when legitimate pay stubs — created using recognized payroll providers — are used for fraudulent purposes. 

6. Proprietary Threat List Check: creating and checking against a known list of users and companies with a history of committing fraud.

7. Fraud Forensics Team: establishing or contracting with a team dedicated to catching the latest fraud tactics to stay on top of fraud trends and build the best defense system.

Nelson, whose company saved clients $156 million in eviction fees in 2024, said the fraud problem is only getting worse with bad actors trying to game the system. 

“People are under the impression that fraud isn’t happening in their area, that it only happens in Southern California or Texas or other highly-populated areas. But fraud has reached a tipping point in all 50 states across all asset classes. There is no property that is immune to fraud. If operators are not smart, they are leaving themselves open to huge vulnerabilities,” he said. “Eviction, financial loss, reputation damage.”

Fortunately, there are reliable solutions for safeguarding properties from fraud, including Snappt’s fraud detection and income verification system. For more insights on fraud trends and how to protect your properties from fraud, check out the full report.