What is the story about?
What's Happening?
Synthetic fraud is the fastest-growing type of identity fraud, accounting for an estimated 85 percent of all identity fraud in the country. Perpetrators create fake IDs by combining real data with falsified names, using them to apply for loans, credit, and other transactions, including apartment leasing. The lack of a real physical victim makes synthetic fraud difficult to identify during the leasing process, leading to financial devastation for property owners.
Why It's Important?
Synthetic fraud poses significant risks to the multifamily housing industry, causing millions of dollars in annual losses from bad debts and skipping. The difficulty in identifying synthetic fraud during the leasing process leads to forced turnover and financial losses for property owners. Addressing synthetic fraud requires advanced tools and proactive measures to mitigate the aftermath of determined fraudsters and better protect businesses.
What's Next?
Property management companies are encouraged to adopt advanced ID verification technologies to catch synthetic fraud early in the application process. Educating teams about potential warning signs during the application process can help diagnose fraudulent activity. Congress is working to crack down on synthetic fraud, with legislation directing the U.S. Social Security Administration to develop a mechanism to verify SSNs upon request by certified financial institutions.
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