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Chicago rental apartment application fraud has been on the rise. Between credit checks, income, employment, background, and previous landlord verification, it’s easier now more than ever for an unqualified tenant to manipulate the system. As a property owner or property management professional in Chicago, it’s important to protect yourself and your rental income from falling victim to rental application fraud.
What is rental application fraud?
Rental application fraud involves providing false or misleading information on a rental application to appear more qualified. This can include falsifying income or employment details, using fake or stolen identification, altering credit scores, and providing fabricated references. The goal is to deceive landlords or property managers to secure a rental property. Income fraud and identity theft are the most common types. Rental application fraud is often committed by those desperate for housing who have likely been denied from previous rental applications, or are already aware that they would not meet the qualifications to get approved for the apartment they desire.
Why is lease application fraud on the rise?
Responding to a survey conducted by the National Multifamily Housing Council between November 15, 2023 and January 9, 2024, 93.3% of owners/managers said they had experienced fraud in the past year – and that the level was on average 40.4% higher than the prior year. When discussing this stark increase in rental application fraud, there’s a few important factors to consider.
Economic Instability
Yes, it’s 2024. No, we are not done talking about Covid-19 and the lingering effects the global pandemic has on our economy, and more specifically, the rental market. In 2020 and for the years to follow, many people faced job losses or reduced income, leading some to falsify information on rental applications to appear more financially stable out of necessity. The shift to online transactions and communications that was a result of Covid-19 also made it simpler for fraudsters to manipulate documents and information without face-to-face interactions. Many renters are still on a slow road to financial recovery after the pandemic shutdowns, meanwhile the cost of living continues to rise.
Competitive Market
With renewal rates as high as 80-90% and record low new apartment deliveries in Chicago, there is more competition for the minimal inventory than ever. Increased rent prices due to a competitive market provokes applicants with bad credit, insufficient income, or criminal history to seek illegitimate means to get approved. In a rental market where one apartment has multiple applications pending at a time, some less qualified applicants might be in a hurry to get approved quickly ahead of others, and therefore provide false information on their application.
Technological Advances
To put it simply, more access and education to technology means that it has never been easier for the average person to commit fraud. Modern technology easily allows renters to create or purchase fake documents, such as pay stubs, employment letters, and identification cards, which can be used to deceive landlords. There are more online destinations to do so than ever. Image editing and document forging software have become more advanced and accessible, making it more common for individuals to alter or create convincing fake documents during the rental application process.
How our processing staff protects landlords from rental application fraud:
The Apartment Source closes thousands of rental transactions per year, and processes double the amount of applications as transactions are closed. In addition to developing an eye for fraud just from the quantity of applications that are reviewed, our processors are highly trained on all of our prior examples of fraud, so they know what to look for. We will verify all provided documentation and personally communicate with listed references so that you don’t have to. Our team thoroughly checks easily forge-able documents like pay stubs, photo IDs, and bank statements, catching fraudulent rental applications and protecting our landlords on a daily basis. Utilizing a professional leasing brokerage when finding new tenants for your rental property will save you a lot of time, headaches, and money in the long run.
Looking for qualified tenants? Let us protect you from fraud as best as we can!
Give us a call: 773-404-9900 or email us at: info@apartmentsource.com
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