The rental industry has long been a lucrative target for fraudsters, and recent years have only made it worse. While online leasing has streamlined the leasing journey for many applicants, it has also opened the door for bad actors to manipulate the system, resulting in unpaid rent and bad debt for rental owners.
The good news is that you can deter fraud from the very start. Read on to explore how technology can enhance security and efficiency in your online leasing process.
The rise of real estate fraud
Fraud has surged in recent years, particularly since the onset of the pandemic. According to the Royal Canadian Mounted Police, Canadians lost $567 million to fraud in 2023, up $37 million from 2022 and $187 million since 2021. The rental industry has also been significantly impacted, with many fraudsters taking advantage of the rising popularity of online leasing.
A recent simplydbs survey confirms this, with over 50% of housing providers representing nearly 400,000 units across Canada reporting a rise in fraudulent rental applications in 2024. Fraudulent documents have become more sophisticated, making it increasingly difficult to detect false applications without the help of technology.
Common forms of fraud include synthetic identity fraud, rental application fraud and third-party fraud. Synthetic identity fraud involves creating a fake identity using a combination of real and fabricated information. Rental application fraud occurs when applicants provide false information on their applications, such as fake references or altered income verification documents. Third-party fraud involves someone other than the applicant providing false information or documents on behalf of the applicant.
In this digital age, relying on onsite teams to play detective is neither practical nor efficient.
Combatting fraud with technology
With the help of AI, biometrics and automation, technology can detect fake IDs instantly, stopping criminals who are trying to exploit the system. Of the options out there, consider a system that is easy to use, easy to train on and able to seamlessly connect to your property-level data.
Overall, you want to choose technology that makes it easy for quality applicants to apply while providing an uninterrupted experience from prospect to resident.
How fraud prevention tech can benefit everyone involved
Implementing an automated screening solution is not just about preventing fraudulent applicants during the leasing process. It’s a proactive approach that can be integrated into various stages of your customer’s lifecycle.
EASY TOURING
Enabling ID verification before in-person tours enhances security before your prospect enters your property. It can also be used to manage resident visitor and vendor access, enhancing security within your communities.
FASTER LEASING
If you implement a connected identity verification solution that seamlessly guides prospects into the applicant stage, prospects who have already verified their identity for a tour won’t have to repeat the process if they proceed with an application. This makes it easy for prospects to complete their application and streamlines the approval process for your staff.
STAFF EFFICIENCY
Using technology to automatically cross-check information and detect any inconsistencies that may indicate potential fraud is a huge game-changer for leasing teams. Not only does this decrease your staff’s manual workload, but it’ll also remove the burden of being detectives.
ONGOING VERIFICATION
Be sure to provide residents with access to a secure portal where they can update their information, as necessary. This contributes to a seamless and secure ongoing resident experience.
Technology: blessing or curse in fraud prevention?
As the rental industry navigates the challenges posed by rising internet-related real estate crimes, technology emerges as both a solution and a deterrent. Online leasing, when coupled with robust ID verification solutions, accelerates the leasing process and strengthens the industry against fraud.
Discover how Yardi’s screening solutions simplify screening for your staff and future residents. Learn more about ID Verify and Yardi Resident Screening.
