The hard reality is that some apartment prospects will never pass a background check. But that doesn’t mean they will stop trying.
More than ever, prospects unequipped to pass a background check on honest terms are trying to circumvent the system. The result has been a significant rise in the use of fake or stolen Social Security numbers (SSN) and fake paystubs, as unqualified prospects try to slip their way through the doors.
Apartment operators are clamoring to counter the escalating trend by educating their teams on the potential warning signs and implementing tech tools that can help diagnose fraudulent activity on applications.
While fake or altered Social Security numbers can be tricky for fraud offenders to utilize in the long-term because they are a government-issued entity, fake paystubs can be easier to get away with. Searching online for “Fake Paystubs” brings an unsettling scene. Several websites will promise fake stubs within minutes.
While maybe not as extreme as SSN fraud, applicants will utilize fake paystubs to make it look like they make enough money to qualify. Some will even use the stubs that they earn from their actual job but alter the numbers to look higher. But if these applicants succeed, delinquent payments are almost to be expected because the applicant doesn’t actually generate the income reported on the stub.
The problem has been compounded within the apartment industry by the rapid adoption of proptech during the pandemic. While virtual and self-tours have been lifesavers for many operators, allowing them to lease vacant units without putting staff at risk or scaring off pandemic-weary prospects, there’s a dark side to taking the leasing process virtual.
“Renter fraud was already on the rise prior to the pandemic, but the increased adoption of agentless touring and leasing tools, which allow residents to find and rent an apartment with zero in-person interaction, has opened the door for even more fraud,” says Alec Page, vice president at Park City, Utah–based RET Ventures, an early-stage venture fund that invests in multifamily technology firms.
This is where ApproveShield steps in with their solution that combines Machine Learning with experienced Analysts that are trained to not only spot fraud attempts, but also bring a human element to the equation that others have unsuccessfully tried to solve with technology alone. Some of the items that separate ApproveShield from the rest are:
ApproveShield identifies recently evicted tenants by finding eviction filings as soon as they occur, instead of relying on databases that only show filings after a 30 to 60-day lag time.
ApproveShield system catches ID fraud, ensuring that applicants are who they claim to be and preventing later problems with non-payment and eviction.
To support legal compliance and fairness, process verifies criminal background checks to weed out mismatched records and determine the most recent disposition of cases.
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