Housing Affordability, Social Media and Fraud - Oh My!

As people and trends change, so do the tactics for online application fraud. A New York comedian jokingly posted a video using Adobe Photoshop to alter her pay stubs and bank statements to pass the employment and rental criteria for an apartment she was hoping to lease. Although she claimed her video was a joke, it received 806,000 views and one can assume that might have an impact on rental application fraud trends, as scammers are now turning to social media to share their application fraud tactics.

According to the FBI’s internet crime reports, the losses associated with internet-based real estate crimes have risen from $213M in 2020 to $350M in 2021 to $397M in 2022. Eighty-five percent of property managers say they are seeing fraud in the application process compared to 66% prior to the pandemic according to a 2022 Snappt survey reported by the National Apartment Association. This shocking statistic alone shows the negative affect fraud has on housing affordability. Daniel Berlind, the CEO of multifamily application verification service Snappt, said, “With the advancements of online document-editing technology, it means that really, anybody can do it.” He goes on to say renters who submit fraudulent documents during the rental application process are seven times more likely to end up in eviction proceedings.

Research shows that fraud drives up owner/operator costs, creates unnecessary stress for law-abiding residents and can increase rents, when owners are unable to recoup their losses. With the overarching goal of making Mecklenburg County a desirable and affordable place to live; lawmakers, property owners, and citizens all have a role to play in fighting online fraudsters.