The characteristics of interference fading in the phase-demodulated phase-sensitive optical time domain reflectometer(φ-OTDR) system are investigated. It is found that the fading waveforms have high similarity for different pulse scans, but obvious differences for different optical frequencies. An improved model for randomness and coherent noise of Rayleigh scattering is presented. It can be concluded that the composite Rayleigh scattering coefficient is a function of laser frequency and the index distribution, which could explain the experimental results reasonably. In order to eliminate the false alarms due to interference fading, a multi-frequency method is proposed, which can improve the accuracy of the phase demodulation in the φ-OTDR system.