5 Myths About Fraud Detection in Multifamily

A survey conducted by the National Multifamily Housing Council (NMHC) between 2023 and 2024 found that an overwhelming 93.3% of respondents reported experiencing fraud within the last 12 months. 

Of that, 84.3% reported applicants falsifying or fabricating pay stubs, employment references, or other income documents. The survey respondents included leading apartment owners, developers, and managers.

Rental fraud often begins with a seemingly legitimate application—and frequently ends in a time-consuming and costly eviction. And it’s very common.

Fraud detection in the multi-family industry is all about catching altered or fraudulent documents before they cause bigger problems. Whether it’s a fake pay stub, bank statement, or ID, it’s getting harder and harder to catch rental fraud, especially as the tenant screening process continues to shift online.

That’s why fraud detection isn’t just a box to check—it’s an essential line of defense. But the problem’s that many common myths still influence how property teams approach fraud detection.

And those misconceptions? They’re costing time, money, and peace of mind. 

It’s time to separate fact from fiction. We’re debunking five common rental fraud myths that could be holding your team back and revealing what it truly takes to stay ahead.

Quick Insights

• Rental fraud is on the rise, and it isn’t easy to spot. With AI-generated documents and advanced editing tools, fake income documents often look real, and manual reviews can’t keep up.

• Fraud doesn’t just occur in “risky” areas. It also takes place in Class A and luxury buildings. No property type is off-limits.

• Credit checks and background screenings are useful, but they won’t reveal forged documents. An applicant can look perfect on paper and still submit fake financial documents and IDs.

• Manual fraud detection methods slow processes down—not technology. Automated tools like Snappt return results within 10 minutes, speeding up the tenant screening process.

• Fraud is preventable—it isn’t just a “cost of doing business.” Snappt catches 99.8% of fraudulent documents and discourages bad actors from applying again.

5 Fraud Detection Myths

Fraud is constantly evolving, and so should your approach to it. Before your team can build a stronger tenant screening process, let’s clear up some of the most common (and costly) misconceptions about fraud detection.

Myth 1: Fraud is Easy to Spot

Fraud doesn’t come with a neon warning sign. Today’s fraudsters are smart, fast, and armed with sophisticated tools and techniques to fool even experienced leasing professionals.

With the likes of document editing software, fraud-as-a-service (FaaS), AI-generated pay stubs, and fake bank statements that look like the real deal, it’s no longer just about catching minor typos or low-effort scams.

The stats prove that fraud is on the rise, too. Before the 2020 pandemic, property managers reported catching 90% of fraudulent rental applications, but now, that number has dropped to 75%.

Manual document reviews may have been the go-to method years ago, but this approach can’t keep pace with the speed and sophistication of modern-day fraud.

Relying on gut instinct or visual checks isn’t enough to stop altered documents from passing through the cracks. And once a fraudulent applicant is approved, it doesn’t take long for unpaid rent, evictions, and revenue loss to follow.

That’s where a fraud detection partner like Snappt helps. Snappt uses advanced, proprietary AI to scan documents for signs of tampering—changes that even experienced eyes can easily miss.

We analyze over 10,000 document features, comparing them against verified data from 2,000+ financial institutions. Trained on a dataset of more than 13 million documents, our technology knows exactly what to flag. 

The result? Faster, more intelligent fraud detection that protects your properties and helps you lease with confidence. Because while fraud might be hard to spot manually, with Snappt, it’s not hard to stop. 

Myth 2: Fraud Only Happens in High-Risk Properties 

There’s a common assumption that rental application fraud only happens in certain places and situations—like properties in low-income areas—but this simply isn’t true.

Fraud isn’t picky. It’s happening everywhere and at every price point, including high-end, Class-A properties and luxury buildings. And fraudsters often purposely target higher-end properties with more expensive rents because the potential payoff is greater. Because who doesn’t want to live in a luxury unit?

  Three-fourths of multi-family operators have experienced a rise in rental fraud cases within their portfolios over the last 12 months.

In today’s market, where leasing teams are dealing with more applications than ever and tighter turnaround times, fraud can occur anywhere—no matter how fancy the building is.

At Snappt, we see this firsthand. Our internal data indicates that fraudulent applications appear across all types of portfolios. There’s no “safe zone” when it comes to application fraud, and assuming it won’t happen to you only increases your risk if you decide not to put fraud detection safeguards in place. 

That’s why Snappt is designed to scale across your entire portfolio. Whether you’re managing a mix of Class A, B, and C properties or focusing solely on luxury leases, our technology pinpoints fraudulent documents with precision, no matter where they rear their head. 

Remember, fraud is a challenge that affects the entire industry. The most effective way to combat it is by using consistent, multi-layer fraud detection technology across the board.

Myth 3: Credit Checks and Background Screens are Sufficient

Credit and background checks are standard in the tenant screening process—and for good reason. They offer valuable insights into an applicant’s financial history, any past evictions, and whether they have a criminal record.

But when it comes to spotting fraud, credit checks and background screens only share a part of the story. Over 70% of property managers reported that most fraud is only discovered after move-in, which suggests the limitations of traditional screenings.

Credit and background checks won’t catch a forged pay stub or altered bank statement. An applicant can have a flawless credit score and still share completely fake income documents. 

A qualified applicant could be living beyond their means or not earning a steady income. To properly assess whether someone can afford rent, look beyond credit history.

Snappt verifies the financial information that matters most at the moment—income and bank account data—using connected payroll software. Snappt also gives property teams access to verified rental payment history, offering a well-rounded and accurate picture of an applicant’s ability to pay on time.

So, while credit checks and background screenings are strongly recommended, they’re not a replacement for modern fraud detection and income verification tools like Snappt. Best practice is to combine them for a more comprehensive, powerful tenant screening process.

Myth 4: Fraud Detection Slows Down Leasing

There’s a common fear among property managers that adding fraud detection to the leasing process will add more time, frustrate applicants, and slow down their teams. But this couldn’t be further from the truth.

If you can relate, know that 77% of property managers report that fraud reduces income or raises costs by between 10 and 20%—the real–time drag is the actual fraud that occurs.

It isn’t fraud detection that causes bottlenecks; it’s how you approach it. Manual document reviews are time-consuming, with leasing teams often left checking pay stubs and bank statements line by line, trying to spot inconsistencies while leaving other tasks on the back burner. 

These manual checks can slow down approvals, increase workloads, and lead to mistakes and missed red flags. While the team is taking their time reviewing applications, great applicants might lose patience and move on to the next available property they like.

But it doesn’t have to be this way. With the right software, fraud detection can be fast, secure, and accurate. Snappt’s technology quickly scans and analyzes documents, providing clear pass/fail results in under 10 minutes so you can act fast. No more guessing games, back-and-forth with applicants, and delays.

Snappt also makes the process smooth for applicants. Instead of waiting days for answers, they can quickly upload their documents, and the platform does the rest.

Fraud detection isn’t a roadblock—it’s a speed boost. When handled properly, you don’t need to choose between efficiency and accuracy. With Snappt, you get both.

Myth 5: Fraud is Unpreventable—It’s Just the Cost of Doing Business  

Some teams accept fraud as inevitable—something that just happens and is another line item in the spending column. But this mindset is costly.

Because fraud is preventable. With the right tools and processes, it’s entirely possible to dramatically reduce your exposure to rental fraud and improve your entire portfolio’s performance in the process.

When fraud is caught early, you avoid issues like missed rent, long-winded evictions, or bad debt write-offs. It doesn’t affect resident happiness or tie up your team’s time and energy.

And catching fraud early protects your property’s reputation. Because fraud is more than just a nuisance—it’s a risk that can lead to real financial consequences in various ways. The good news? You can take action.

Our clients at Snappt have seen this firsthand. Properties using our technology are able to reduce fraud by up to 50%. That’s because our technology catches 99.8% of fraudulent documents submitted—often spotting what people can’t.

When a typical client first teams up with Snappt, an average of one in six applicants submits fraudulent information. And we catch every single one.

Within three months, that figure drops to one in nine, leading to a 35% reduction. Why? Fraudsters learn fast. In most cases, once they realize a property is using Snappt, they no longer bother applying. 

The Truth About Rental Fraud and How to Stay Ahead

Fraud in the multi-family property industry isn’t rare, nor is it easy to catch with manual checks. It’s more common, sophisticated, and damaging than many leasing teams realize.

Rental fraud myths still linger, and the reality is that relying on the likes of gut instincts, credit checks, and manual reviews just doesn’t cut it anymore. But with the right tools and approach, fraud is absolutely preventable.

Looking for the right fraud detection solution? Download our free Buyer’s Guide to Applicant Fraud Detection to learn what to look for, what to avoid, and how to choose a tool that actually protects your properties.