At Lifeboat Lettings we use a specialist tenant referencing company, Goodlord, to process all our tenancy applications. There are a number of very good reasons we have chosen Goodlord as our tenant referencing partner, but one of the main reasons is their anti-fraud technology. As a lettings agency or private landlord conducting your own reference checks, making sure you have robust systems to detect fraudulent applications is paramount. This is particularly important currently, as with the increased cost of living, rapidly rising rents and affordability issues for tenants, tenancy fraud is on the rise.
The good news is that overall, tenancy fraud is still relatively rare. Goodlord have recently analysed a sample size of over 300,000 tenancy applications submitted by people looking to rent homes in 2022. Only a very small percentage of these applications were proved to be fraudulent – about 0.1%. However, of those that were fraudulent, over half of those involved payslip fraud.
Extracted from an article by Goodlord, Blake Richmond, Managing Director of Referencing explains that there are lots of ways people try to cheat the process when it comes to pay slips:
“As the technology fraudsters use gets smarter, agents should ensure they’re deploying the best-in-class tech tools to combat it. The use of Open Banking, AI-based ID tools, and credit referencing software are incredibly effective at picking up this kind of fraud. Likewise, it’s essential that agents and landlords look out for red flags in tenant behaviour.’
These include refusing to cooperate with Open Banking requests or, when it comes to the pay slips, using the wrong tax codes, missing out key sections, or forgetting to add NET/Gross pay. Having the right systems in place and an eagle eye on the details is vital to spot fraudulent applications quickly and accurately.
When renting a property, applicants must provide accurate details around their employment status and income, so that letting agents and landlords can ensure they will be able to afford the rent.
Those who do not pass affordability criteria (typically having annual earnings above 30 times the monthly rent) may be asked to provide a guarantor. The use of guarantors is on the rise. According to recent data in 2022, just under 15% of renters required a guarantor, up from less than 12% in 2021.
At Lifeboat Lettings we ensure – with the help of Goodlord – that all guarantors are also referenced checked to the same stringent standards as tenants.
If you have any questions about tenants referencing, deposits, inventory, maintenance issues, etc, email contact@lifeboatlettings.com. We are here to help!
