The Problem
A couple of years ago, we faced a growing problem: fraudulent applications. Residents would pass all our qualifications, move in, and then stop paying rent one to three months later. The eviction process would drag on for a year, creating significant financial damage to the properties we managed.
Like many property management companies, we turned to technology for the solution.
Three Solutions, One Revelation
We tested three different fraud detection solutions across our struggling properties. Each promised to catch fake documents, verify income, and stop fraudulent applicants.
The first month after implementing the third solution, we saw our lead generation and application conversion rates drop significantly. “Perfect,” we thought. “It’s doing its job, stopping fraudulent applications before they happen.”
By month three, applications had come to a complete standstill. We weren’t just filtering out fraud; we were blocking nearly all applications.
The Real Problem: Understanding Our Residents
The breakthrough came from an unexpected place. While launching our OneWall resident app, we examined adoption rates at each property. As part of that analysis, we looked at what percentage of residents paid rent online.
The correlation hit us immediately: the properties where we’d implemented fraud detection had by far the lowest online payment ratios across our entire portfolio.
Many of those residents weren’t accustomed to managing finances through digital platforms. More importantly, many don’t pay rent with credit cards or bank accounts. They receive paychecks, cash them at check-cashing services, and purchase money orders.
When these residents tried to apply for an apartment and were asked to verify income by linking to their bank account, they stopped. They couldn’t income-verify through the system, even though they had legitimate income and steady employment.
The Lesson: Adapt to Your Residents
This experience forced us to completely rethink our customer. The solution wasn’t better technology. It was better human processes:
- More in-person conversations with applicants to understand their overall situation
- Enhanced training for onsite teams on how to verify employment and review documents manually
- Stronger practices for evaluating non-traditional income documentation
This approach requires careful balance. We must empower our teams to make informed decisions while ensuring we don’t introduce bias into the application process.
Technology Enables, People Decide
Fraud detection tools have their place. But in some markets, where residents often operate outside traditional banking systems, technology alone will fail. You need people who understand the community, who can have real conversations, and who know how to verify information without relying solely on automated systems.
Let’s continue the conversation.
The fraud detection challenge taught us that understanding your residents is more valuable than any technology solution. At OneWall, we’re committed to serving workforce housing residents effectively, using technology where it helps and relying on trained, empathetic people where technology falls short.
Property management is complex, and the best solutions come from shared incentives. Whether you’re exploring new approaches or facing specific challenges, we’re here to talk. Visit us at onewallcommunities.com or call us at (646) 596-7068.