There has been a significant increase in fraudulent tenant activity in recent months, new research shows.
Agents have had to be on high alert, with Homeppl’s data uncovering an alarming level of recent fraud.
In the first quarter of this year alone, Homeppl’s fraud detection tests identified that 2% of all tenant applications were fraudulent, with the value of these applications reaching three and a half times higher than the values from Q4 last year.
Alexander Siedes, CEO and founder of Homeppl, said: “One in 50 of all tenant applications we handled in Q1 2021 was fraudulent. But this was even more prevalent for particular clients as a result of the areas they work in and their client demographic.”
For one London-based agency, one in 20 of all tenant applications were fraudulent, according to Siedes.
He added: “Due to the location, a lot of this was professional fraud – when the tenant is attempting to take possession of a high value property and sublet it through short lets sites such as Airbnb to maximise income whilst defaulting on the rent to the landlord.”
Siedes nots that amateur fraud is on the rise, owed in part to the Covid-19 pandemic.
He says that common techniques used by amateur fraudsters are fake IDs, including passports and driving licences, and doctored documentation such as payslips, bank statements, letters of employment, proof of address and proof of study, as well as fake email and websites to mimic employers and references.
Siedes added: “Amateur fraud occurs when tenants aren’t earning enough to afford the property and this type of activity seems to have risen as a result of the pandemic which could be due to tenants being on furlough or losing their jobs.”
Comments (4)
Is this item a joke!?
Tenant fraud is far more than has been suggested.
Most tenants are fraudulent.
They all miss out important information.
Most referencing is totally inadequate.
I’d say 90% of tenant applications are fraudulent.
Only RGI referencing is worth anything which is why very few tenants qualify for it.
The quality of most tenants doesn’t meet the requirements for most tenancies.
Most tenants are ‘economical with the truth’
I would mitigate this with “in your experience most tenants are ‘economical’ with the truth”
I however would have to disagree and state that I have had a very good experience with potential tenants, only having 2 cases of attempted “misinformation” by potential tenants out of a couple hundred since the start of the pandemic. If you use a good 3rd party referencing company there is nothing to fear and indeed should you have any misgivings whatsoever then you advise the landlord to obtain Rent Protection.
I think Paul’s point about false – fraudulent ( to varying degrees ) tenancy applications is more accurate as being Far, far in excess of 2% Whether I would go so far as to say 90 %, I’m not sure. But applying for a tenancy is like applying for anything, a job, credit etc.
An applicant is going to want to show themselves in the best light and not disclose Every negative fact about themselves. How many landlords have let to tenants who’ve brought pets in, or contravened ANY clause of the tenancy agreement.
If we took that as a measure, the percentage would go more towards Paul’s figure. ( for the Two who disagreed with his post ) I rather like the tenant referencing ‘ tongue-in-cheek ‘ photo that we published on our Twitter page yesterday 😉
Absolutely there are of course degrees of economy when it comes to divulging information. Always remember a fraudster I had who even passed RGI checking. Discovered she had been in receipt of a small amount of HB after she was eventually evicted. She seemed to have no problem renting somewhere else nearby. She cost the RGI company £10000!! I’ve had 5 wronguns cost me thousands. Perhaps the article is more about outright real fraud where an applicant intends to carry out criminal activity etc. That could be sub-letting or a cannabis farm! That would be more in the 30% region.
But certainly the adage must be to never trust what a tenant applicant states; ALWAYS VERIFY!!