Six out of 10 Property Managers Experienced Fraud in Past Two Years

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TransUnion research finds outdated risk assessment methods leading to alarming levels of late detection

CHICAGO, April 04, 2024 (GLOBE NEWSWIRE) -- As the rental market grew over the past couple years, fraud naturally followed. Six out of ten property managers experienced fraud in the past two years, according to research from TransUnion’s tenant and employment screening business.

More concerning, 38% of property managers did not identify the fraud until after the applicant moved in. These findings and more are included in TransUnion’s Multifamily Report: Fraud Continues to Be a Growing Threat.

“Once fraudsters become residents, the dangers and damages only compound,” said Maitri Johnson, senior vice president of TransUnion’s tenant and employment screening business. “Delinquencies and evictions are expensive and take significant time and effort to enact. In the meantime, the other residents might be at risk with fraudsters nearby.”

The report found 43% of property managers saw increased evictions due to fraud. More than a quarter (27%) had increased bad debt and other financial loss.

Property managers appear almost evenly split with their approaches to mitigating fraud risk. About one third (34%) use outsourced services and technologies, while a quarter have in-house employees who manually detect fraud. However, one third do not use any formal tools but, instead, rely on visual, experience-based risk assessments.

“Those who rely on their instinct, rather than a formal methodology, may put themselves at risk,” said Johnson. “Not only is that not effective for detecting potential fraud—especially as fraudsters become increasingly sophisticated—it also risks denying housing based on the property manager’s biases.”

The report found that even in-house manual risk assessment processes left vulnerabilities to potential fraud. For example, manually scanning driver’s licenses, checking credit scores and verifying employment might not protect against fraudsters using synthetic identities.

Comprehensive, identity-based solutions are powerful in helping defend against rental fraud. Such technologies help detect red flags that indicate fraudulent applicants before they move in. These solutions also streamline the process for legitimate applicants, getting them approved quickly.

“There is no one-size-fits-all approach to solving fraud. Ultimately, multi-layered, identity-based fraud solutions improve the customer experience by creating efficient processes for applicants and protecting residents from would-be fraudulent neighbors,” added Johnson.

TranUnion’s TruValidate™ ResidentID solution is designed specifically for multifamily operators, using multilayered, data-driven defenses to help stop applicant fraud.

Click here to read the Multifamily Report: Fraud Continues to Be a Growing Threat.

Research MethodologyThis online survey of 98 property managers was conducted between October 23, 2023 - November 17, 2023, by TransUnion. Property Managers were surveyed via email through an online research platform. Survey questions were administered in English. The sample includes property managers who oversee a variety of housing types, number of units, and locations. These research results are unweighted and statistically significant at a 95% confidence level within ±9.9 percentage points based on calculated error margin. Please note some chart percentages may not add up to 100% due to rounding or multiple answers being accepted.

About TransUnion (NYSE: TRU) TransUnion is a global information and insights company with over 13,000 associates operating in more than 30 countries. We make trust possible by ensuring each person is reliably represented in the marketplace. We do this with a Tru™ picture of each person: an actionable view of consumers, stewarded with care. Through our acquisitions and technology investments we have developed innovative solutions that extend beyond our strong foundation in core credit into areas such as marketing, fraud, risk and advanced analytics. As a result, consumers and businesses can transact with confidence and achieve great things. We call this Information for Good® — and it leads to economic opportunity, great experiences and personal empowerment for millions of people around the world. http://www.transunion.com/business

 

ContactDave Blumberg
 TransUnion
E-maildavid.blumberg@transunion.com
Telephone312-972-6646

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Source: TransUnion

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