Popular Holiday Scams and How to Avoid Them

According to the FBI, the holiday season is one of the busiest times of year for scammers, whose fraudulent applications can snare apartment companies, lenders, and residents. Costs run higher than $500 million. AARP’s Holiday Scams Report found that 75% of Americans were targeted or victimized by application process fraud, credit card scams, data breaches, and personal data theft.

For multifamily operators, holiday scams compound the issue of rental application fraud, a year-round scourge in the industry. While a slowdown in leasing during the holidays offers temporary respite application scams, these bad actors are waiting just outside – and sometimes within – property managers’ doors.

Social Media Scams

Online shopping fraud attacks are among the most common types of holiday fraud. They employ social media ads to steer shoppers to fake online stores, fake bank account openings, or share personal information under the guise of identity verification. The fraud risk here is high— and all social media shopping links should be thoroughly vetted to make sure they’ve been through an authentication process to ensure they’re legit.

Phishing link scams, where cybercriminals send malicious URLs to social media users, steal personal information, or infect that person’s device with malware that can pose a continuing threat throughout the year. In addition, nearly 50% of social media users have been victims of online shopping scams.

While many think older adults fall victim to these schemes more often than younger, internet-savvy users, the opposite is true. According to AARP, in the 18 to 34-year-old demographic – the largest cohort of renters – more than 81% of respondents had fallen victim to fraud, compared to 69% of adults aged 65+.

That means your residents could be especially prone to these scams, which can wreak havoc on an individual’s financial life when they lead to identity theft. The repercussions for property managers come when residents experience economic turmoil and struggle to pay rent. In addition, credit card application fraud is a seemingly rampant issue, where false credit reports are drafted and attached to online applications to make applicants seem more qualified than they are.

You can help residents avoid becoming victims of these crimes by providing alerts on their resident portals and preventative language in other resident communications.

Empty Gift Cards

Another big target for holiday scammers is retailer gift cards, which nearly two-thirds of shoppers plan to buy or give this year. Fraudsters often tamper with gift cards on physical retail racks, so that as soon as a card is activated, its funds are automatically drained. According to AARP, 21% of Americans have either given or received gift cards with a $0 balance.

For property managers who give residents gift cards during the holidays, being a victim of this type of fraud is embarrassing and can anger residents. Who wouldn’t be miffed by getting a $10 Starbucks gift card only to find out it’s empty?

Save yourself the headache and only buy gift cards from retailers’ official online sites. Keep them safe and locked away until it’s time to give them to your tenants.

Fake Family Scams

This one is especially devious around the holidays. Hackers will pose as family members and message the victim, asking for money. They typically request a wire transfer or gift card and claim financial trouble. The message typically sounds a little strange and out of blue and often requests that the sender not tell any other family members.

To prevent this from happening, it’s best to warn family members of the increase in cyber attacks during the holidays. Let them know that they should call that person directly and to not send any money without checking first.

Package Theft

One of the hallmarks of modern apartment life during the holidays is the overflowing package room. Packages get left in a common area or in front of an individual resident’s door, leaving them susceptible to theft. Nearby scammers can quickly enter the lobby during business hours or even other residents! More than a quarter of all Americans report stolen packages each year.

At multifamily properties, a tried and true solution has been secure package lockers. But space in these lockers runs out quickly during the holidays. One way around this conundrum is to enable in-unit deliveries by employing smart locks and a resident portal that allows renters to opt-in to having staff enter their homes.

There’s also a new scam that involves leaving a note on your door, claiming to have a package for you that couldn’t be delivered. The note contains a phone number to call to reschedule the delivery. If you call the number, you’ll be greeted with questions designed to steal your identity or credit card information.

If you receive a missed delivery note, examine it closely for any mistakes or other signs that it could be fraudulent. Check your email for recent orders to see if a delivery was scheduled for that date, too. Even if the notice looks legitimate, it’s better to visit the company’s website to find the official customer service number.

Fake Rental Listings

The rise of short-term rentals has also led to an increase in fake rental listings. Scammers copy content from a legitimate apartment firm’s website and reposted it to take bookings — and the accompanying fees — elsewhere.

The Better Business Bureau says these rental ploys are on the rise, with fraudsters posting on recognizable third-party sites like VRBO or AirBnb.

One way to combat this trend is to set up a Google alert with your property’s name to flag unauthorized listings. Doing so can also help your community’s reputation when negative reviews populate online, giving property managers a chance to respond and mitigate the situation.

When people see their neighbors decorating for the holidays, scammers see only one thing – opportunity. As a property manager, take a holiday break but keep in mind that fraudsters don’t take breaks. By taking simple steps to prevent scams, you can ensure a festive spirit and year-end cheer for all.

Document Fraud

As we mentioned, the holidays are ripe for any type of scam, and document fraud is no exception. Document fraud can include anything from unauthorized credit checks, forged identification cards and documents, or falsified bank statements and pay stubs. Tenants often use the latter to get approved for properties that they otherwise wouldn’t be able to.

To protect yourself from this, it’s important to create a verification process for prospective tenants. Requiring proof of identity and income is standard practice when screening a tenant. Property managers should also run a background check, contact previous landlords, and review their rental history.

If that’s not enough, you can also implement fraud detection software. Snappt’s data-driven tenant fraud detection software saves you time, money, and guesswork—all while protecting your properties. If you’d like to know your risk and see what tenant fraud is costing you, try our free ROI calculator!

To Sum Up…

The holidays are both a joyous and stressful time. The uptick in scams during this season can be a cause for concern, but with the right precautions, you can protect your business from all sorts of schemes.