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April 16, 2024

Document Fraud Exposed: Tools and Tactics Used by Scammers

Daniel Berlind
CEO

It’s no secret that fraud has become a rampant problem in the housing industry. From fake pay stubs to fake IDs, applicants have to get more and more creative to secure the apartment they have their eye on.

But why has this fraud epidemic reached such a fever pitch? The answer lies in the competitive nature of the housing market. With limited inventory and high demand in many areas throughout the country, renters will do whatever it takes to secure their dream apartment. Sites like TikTok and Reddit are full of individuals providing tips on how to alter documents and “sneak past” fraud detection systems like Snappt.

Let’s take a look at these types of methods fraudulent actors can use to commit fraud and review how your leasing team can be better equipped to prevent document fraud.

Snappt Fraud Forensics Team

So how do we stay one step ahead of fraudsters?

The Snappt Fraud Forensics team represents our commitment to staying at the forefront of fraud detection. This dedicated team identifies and investigates potential vulnerabilities, extracting valuable insights to continuously enhance and update our system. While achieving 100% accuracy is impossible, this proactive approach has enabled us to outpace potential fraudsters, contributing to our industry-leading 99.8% accuracy rate.

We’re the only fraud detection company that proactively finds fraudsters and investigates their methods. Our team is constantly studying new tips, techniques, and patterns used by fraudsters so we can stay ahead of the curve, and our system is constantly evolving to protect our customers from the latest fraud attempts.

Tools and Tactics Used to Commit Fraud

Text Insertion

One of the most common ways applicants edit their documents is to insert or edit text directly. This typically looks like an edit on a bank statement or pay stub to increase their financial standings. Our AI uses advanced algorithms that can easily detect these changes and flag them as edited; more basic solutions on the market (such as Optical Character Recognition, or OCR) may be unable to.

Pay Stub and Bank Statement Templates

Some applicants find templates online to replicate popular payroll providers, such as ADP. They will take this template, enter whatever information they want, and submit it to the leasing team.  Because our system scans all of the metadata on the document, we can easily recognize this as a fake document.

ID Theft

Identity fraud is a growing concern in today’s digital age. Applicants may use stolen personal information to create fake documents, create an AI-generated fake ID, or impersonate someone else entirely. Our technology cross-references the document provided by the applicant with a biometric liveness scan to verify their identity.

Social Engineering, How-To Guides

Fraudsters also use social engineering techniques to try and manipulate our system. This could look like someone providing tips on how to physically alter their documents, or they could be providing workarounds to try to avoid the system altogether.

Done-For-You Documents

Instead of providing you with a blank template to create your own income document, done-for-you documents are when a company or individual creates a complete document for someone.

For example, an individual can contact one of these companies for a pay stub, supplying the amounts and any other relevant information. Then the company will create a pay stub using that information and provide it to the individual, ready to use.

Examples

TikTok

Individuals claiming to have “Snappt-approved” financial documents can be found all over TikTok. To explore this claim, our Fraud Forensics team attempted to purchase one of these documents from a user twice – the first time, the user told us that their account was frozen. The second time, they accepted payment and then never responded again. As a result, we deemed this a scam to get money with no actual retrieval of documents.

Another user claimed to sell “Snappt-approved” pay stubs and provided advice on how to avoid sending in bank statements. They tell applicants to say they get paid by check because 9/10 times, they will ask for additional paystubs, a W2, or a tax return.

How does our team combat this? We now manually verify documents from this source.

Fake 1099 Forms

Some companies offer to add you to their payroll as a 1099 employee to bypass the Snappt system. One such company uses a legitimate payroll service with a clean source, which can be difficult to catch. Our team is able to build specific protocols for these companies once identified to avoid them getting through our system:

  • Report the business/website 
  • Monitor all ADP pay stubs that use specific metadata.
  • Automatically detect and flag documents from known fraudulent sources for additional review

Given that Snappt is the only fraud detection company with an in-house fraud forensics team, these types of providers likely go completely undetected by our competition.

Reddit

There are a number of users on Reddit who state that they can help bypass Snappt. After contacting one of these sources, they informed our team that they no longer sell “Snappt-approved paystubs.” On their Reddit page, they also say their bank statements are “Not Snappt approved.”

This isn’t the first time a Reddit user or company has claimed to be able to defeat Snappt technology. However, they have not been able to defeat our technology yet – our algorithm is skilled at detecting the smallest of manipulations, which is why so many of these users can’t provide satisfactory results to their customers.

Tips for Identifying Fraud

Educate Your Team

Being well-informed about prevalent fraudulent document practices is crucial for spotting potential red flags. Familiarize yourself with typical deceptive tactics used by tenants, such as offering false contact details for references. Stay updated on current industry trends related to document fraud to enhance the protection of your investment.

Use Fraud Detection Technology

What better way to protect your property than by implementing comprehensive fraud detection? Effective fraud detection software can scan for inconsistencies or suspicious information in rental applications and income documents. This can include verifying the authenticity of IDs, pay stubs, and bank statements. Investing in this type of technology saves you time and money by catching fraudsters before they step foot on your property.

At Snappt, we catch 99.8% of edited documents, an unmatched accuracy rate in the industry. Need to establish a stronger fraud detection game plan for your properties?  Schedule a free demo with us! 

Screen Prospective Renters Thoroughly

A fundamental aspect of any reputable property management business is the inclusion of a comprehensive screening process. This procedure ensures that applicants are carefully vetted, creating a more secure and safe rental environment.

This process should include…

  • Application 
  • Credit check
  • Background check 
  • Rental history
  • Fraud detection 
  • Identity verification 

An application, credit check, background check, and rental history highlight their past actions; fraud detection and ID verification tell you what’s going on in the present day. Are they who they say they are? Are their income documents legit? Utilizing all of these elements in your screening process provides the most accurate picture of your applicant and mitigates risk.

Verify Employment and Income

Be sure to contact the applicant’s employer directly to confirm their job status, income, and years of employment. Always exert caution if a prospective renter is uncooperative related to providing contact information for their employer. Trustworthy tenants should never have an issue with your verification process.

Check References

Contacting previous landlords and personal references is vital during the screening process. Inquire about the applicant’s rental and payment history, as well as their conduct as a tenant, with detailed and specific questions. Beware of fraudulent tenants who may offer false references posing as former landlords. Always verify the authenticity of the provided references to ensure accuracy.