The latest research by lettings and estate agent, Benham and Reeves, has revealed the rise in fraudulent rental applications in the UK and the tricks being deployed to fool letting agents and landlords.
As reported in Property Reporter, and using data from their referencing agency, LetRef, Benham and Reeves found an average of six fraudulent applications a month in 2018, using either fake bank statements and fake or cloned employers in order to pass the referencing stage of the tenancy process. So far this year, this has already hit an average of 13 per month, a 117% increase.
This increase is largely due to criminality with those looking to fraudulently rent in order to sublet at inflated prices or use properties for brothels or drug dens. Given the high rent being asked, particularly in London, the proceeds can be substantial and with such a poor housing court system to evict tenants, landlords run huge risks.
With the recent introduction of the Tenant Fee Act 2019 meaning letting agents can no longer charge tenants for references, it’s expected that the level of fraudulent applications will continue to increase as these applicants know it won’t cost them a penny should they fail, all while landlords foot the bill.
But the problem goes beyond fake bank statements and more worryingly, Benham and Reeves has seen a notable increase in the number of fake passports being used by fraudsters. In 2018, there were a total of five cases using fake passports, in the first five months of this year alone, there have been 11 cases of fake passports being used. This is due to a number of expert forgers who know the code formatting required to pass an AML check.
Paul Shamplina, founder of Landlord Action, believes that those letting agents and referencing companies who invest in technology with the means to validate tenants’ financial means and payment histories will stand to benefit in the future, as landlords look for greater assurances.
Paul commented: “Technology has made it easier for people to falsify documents, which is why letting agents and referencing companies need to invest in even smarter technology which improves fraud detection. Landlords should also ask questions, ask to see the full referencing report and take time to grill down any information which does not appear to stack up.”
Marc von Grundherr, Director of Benham and Reeves, added: “This surge in fake applications is a very worrying statistic for a rental market that is already straining under the current requirements of a ‘Generation Rent’ and this increase demonstrates the importance of using a bonafide referencing company, where staff have been given specialist training from the National Crime Agency on recognising fraudulent documents.
Of course, BONAFiDEE is the preferred choice for letting agents and private landlords when it comes to identity verification and e-signing of important contracts and agreements. Using BONAFiDEE’s advanced e-signature solution entirely negates the need to print tenancy agreements, inspection reports and other important documents. And with a choice of in-built ID checks, BONAFiDEE provides property agents with the means to reduce the risk of letting a property to inappropriate or fraudulent tenants.
