Reducing the Potential for Rent Payment Fraud with Transaction Risk Monitoring

As online payments for rent and fees increase, apartment operators are becoming more vulnerable to payment fraud. But there are ways to head off potentially fraudulent transactions. You just have to have the right transaction risk tools to detect suspect activity. It’s no secret that the world continues to embrace shopping and paying bills online. In 2020, web debits accounted for nearly 30% of ACH network volume. And current market trends reinforce the expectation that renters will be offered online access through multiple devices and channels for self-service. More multifamily renters are paying by debit or credit card. According to industry data, 60% of apartment renters prefer to pay this way. But as online payment channels normalize, fraud is increasing. The FTC received 4.8 million identity theft and fraud reports last year. In addition, nearly 500,000 reports of imposter scams were filed, representing the second largest threat by bad actors. Not surprisingly, the focus on security is sharpening. Identifying the signs of payment fraud Properties that cannot detect potential fraudulent transactions are at high risk, says Nancy Morlini, Senior Vice President of Payments at RealPage. Over her 20 years in payments, she’s learned to recognize suspicious patterns and activities that could leave apartments holding the bag. Behavior anomalies, stolen card testing, high rates of card declines, chargebacks, excessive returns and unusual ACH transactional patterns are top indicators. A behavior anomaly may include a resident using different payment methods each month or payments in the name of someone other than the resident. Even a spike in payments collected or an increase in money order receipts at a property could indicate potential issues. Another growing fraud trend is stolen card testing, when a bad actor attempts a small dollar transaction using stolen card information to see if the transaction is approved. If it is, the card likely will be u...