Tenancy fraud is on the rise. Back in July 2023, we wrote one of our most popular article about the potential for increased tenancy fraud – Most Common Lies on a Rental Application. So we thought we would give you some more information on this subject.
Lettings application experts Goodlord have recently conducted a survey comparing data from 2022 and 2023 and have found that the number of fraudulent applications from tenants looking to secure a new rental property rose by 140% year on year.
Goodlord compared a sample of more than 300,000 tenancy applications from 2022 with a similar sized sample of applications from 2023. The data from 2022, identified 1.2 cases of fraud in every 1,000 applications. In 2023, this rose to 2.9 cases in every 1,000 – a rise of 140% year on year.
The most common form of fraud was payslip fraud – falsifying details such as income or source on payslips submitted for referencing purposes. Methods used displayed various levels of sophistication.
In 2023 alone, pay slip fraud accounted for 58% of all fraud cases detected and caught by Goodlord. Even one of these fraud attempts being missed during the vetting process could cost the agent or landlord many thousands of pounds.
Many other forms of fraud were picked up by Goodlord over the last year. These include providing false passport images, falsely editing bank statements, supplying fake references, and claiming to work for companies that didn’t even exist!
Despite the vast majority of applications being genuine, the significant increase in fraud over the last year highlights the need for strong safeguards against fraudulent applications. Lifeboat Lettings has been a longtime customer of Goodlord and we and our landlord clients have benefited from their sophisticated anti-fraud technology; intercepting one attempt at payslip fraud in 2023. We have even had a completely different individual turn up to start the tenancy!
It’s worth noting at this stage that tenancy fraud is a criminal offence. This type of fraud fits into a certain legal category referred to as ‘Obtaining goods and services by deception’. The official description is as follows:
‘Obtaining goods or services by deception is an offence where a person dishonestly obtains services from another by any deception. It is obtaining of services where the other is induced to confer a benefit by doing some act, or causing or permitting some act to be done, on the understanding that the benefit has been or will be paid for.’
Given the current pressures on the housing market, it’s understandable that this type of fraud is on the increase. However, being caught having committed any fraud, will result in an entry on the National Fraud Database. This will impact future job prospects and other things such as securing loans.
One of the reasons we use Goodlord is their very sophisticated fraud detection algorithms. Goodlord also integrates with payroll providers, HMRC, the fraud database and Open Banking. This makes it increasingly hard for criminal tenancy applications to slip through the net.
Are you concerned about tenancy fraud? If you are, make sure you or your agent use anti-fraud referencing technology. If you would like to know how this works, or how we could help you get the right tenants either through our tenant find or our full management service, get in contact via email contact@lifeboatlettings.com or call 01233 802803.
