Letting agents who have experienced fraudulent tenancy applications are being invited to come forward with examples in order to form a clearer picture of what and how fraudsters are operating.
Propertymark says it wants to strengthen its message to government with a view to addressing this issue, and is asking agents to email policy@propertymark.co.uk.
Propertymark says that falsified bank statements, references and payslips are some of the documents that are now appearing more legitimate meaning agents are at greater risk of falling into a dangerous trap.
A recent case study presented to Propertymark by member agency, Tay Letting, which has branches across Scotland, saw a tenant submit fraudulent documents, including bank statements, income tax returns and a credit check, and ultimately succeed in obtaining a high-end property in 2019.
With the eviction ban in place across Scotland for over a year, the tenant was able to live rent free for several months, until finally being evicted this summer, having accrued over £60,000 of arrears.
Lorna Taylor, director at Tay Letting, commented: “To guard against these fraudulent applicants, we now send all applications to an independent referencing agency as a matter of course to verify as far as possible that the information we have received is legitimate.”
Arrears can continue to accrue for months on end and given the current Covid-19 regulations which provide additional protections, these tenants are continuing to live in the property without making any rental payments leaving landlords to pick up the costs. Agents have noted some effective ways of spotting fraudulent activity, including:
- Checking whether the applicant is a director of a company by using the Companies House website for details including looking to see how long ago the company was incorporated, and whether it has been filing annual accounts.
- Scrutinising bank statements to check what the applicant’s income and expenditure looks like. As most people receive their salary into their current account there should be at least some evidence that the statements reflect a real person living their life.
- The use of open banking allows a tenant to securely share their financial information with a referencing agency which validates their bank statements and checks to see if the bank balances match up.
Propertymark is working to ensure that all governments across the UK are aware of this issue and to make sure that landlords can easily recover their properties where it has been established to have been let under a fraudulent tenant application.
Nathan Emerson, Propertymark’s CEO, commented: “Fraudulent tenants who are acquiring often high-end properties fully knowing they cannot afford them is a growing problem which needs immediate attention. With the increase in cases and the sophisticated ways these people are producing falsified documents, agents can be completely unaware of this fraudulent activity until faced with the devastating consequences. Agents should remain vigilant and do all they can to weed out the criminals from the law-abiding tenants.”
Comments (16)
[Sentence removed as it breached posting rules]I’ve always paid my rent in full and on time despite that I abhor the economic system … it is stacked against people like me and firmly in favour of people with wealth and capital. The point I’m getting to is that although I am a compliant and paying tenant, I love stories like this. [Sentence removed as it breached posting rules] And £60K arrears? Lmao!!! I hope that landlord’s finances have been decimated, lol
Have you ever thought that the system isn’t stacked against you? Perhaps (as your comment would suggest), you’re just a rather unpleasant person?
You should also be aware the vast majority (possibly 85% +/-) of Landlords are a far cry from being [Word removed as it breached posting guidelines], who will struggle financially in the event that any serious arrears are accrued.
Let’s hope the [Word removed as it breached posting guidelines]to which you pay your rent doesn’t have his finances decimated…I suspect you won’t be doing too much “LOL-ing” when you need to move.
I’ve lived in 5 different flats and 2 houses in the last 15 years. Moving again would not be difficult. I’m quite well versed in doing it.
If my current landlord’s finances were decimated and he lost the flat, I would laugh at his misfortune and the poetic justice of it all, and just move to yet another private rental flat. I’ve never once been declined before, I am after all, a good paying tenant that looked after the places I lived in. Being an “unpleasant person” or not, it makes no difference to the economic system we are in. Most people earning under £30k cannot get a mortgage.
if it wasn’t for those that landlords, you would be living on the streets. Sad and vile person you are, this isn’t Facebook.
No doubt ‘Tenant’ post and registration will be permanatley removed for breaching site code of conduct.
Not really, you’re just not very educated on supply and demand. If there were no “landlords” do you seriously think billions of people world wide would end up living on the streets? Lol. Do you not think an alternative would exist in it’s place if there were suddenly “no more landlords”?
Notwithstanding, there will always be landlords needing good paying tenants like me who look after properties. So I’m not expecting to be homeless any time soon.
Yep, millions do live on the streets worldwide. Many governments around the world do not provide housing, let alone benefits. Without landlords in the UK you would be on a park bench or sleeping rough under a railway bridge hoping not to be mugged of your cardboard suit. So lucky for you there are wealthy people bailing out governments and something the educated know, is the UK is reliant on PRS bailing out SRS and don’t have to sink into the depths of a gutter with bad manners and language to make a point to make a fool of themselves.
Now noted that editor has deleted your tone and words for breaching posting rules.
Lesson in Life: The Story of the Donkey and Tiger
The donkey told the tiger:
′′The grass is blue”.
The tiger replied:
′′No, the grass is green”.
The discussion became heated up, and the two decided to submit the issue to arbitration, and to do so they approached the lion, King of the Jungle.
Before reaching the clearing in the forest where the lion was sitting on his throne, the donkey started screaming:
′′Your Highness, is it true that grass is blue?”.
The lion replied:
“True, the grass is blue”.
The donkey rushed forward and continued:
′′The tiger disagrees with me and contradicts me and annoys me please punish him”.
The king then declared:
′′The tiger will be punished with 5 years of silence”.
The donkey jumped for joy and went on his way, content and repeating:
′′The grass is blue”…
The tiger accepted his punishment, but he asked the lion:
′′Your Majesty, why have you punished me, after all, the grass is green?”
The lion replied:
′′In fact, the grass is green”.
The tiger asked:
′′So why do you punish me?”
The lion replied:
′′That has nothing to do with the question of whether the grass is blue or green. The punishment is because it is not possible for a brave, intelligent creature like you to waste time arguing with a donkey, and on top of that to come and bother me with that question”.
The worst waste of time is arguing with the fool and fanatic who doesn’t care about truth or reality, but only the victory of their beliefs and illusions. Never waste time on discussions that make no sense… There are people who for all the evidence presented to them, do not have the ability to understand, and others who are blinded by ego, hatred and resentment, and the only thing that they want is to be right even if they aren’t. When ignorance screams, intelligence shuts up. Your peace and tranquility are worth more.
Jackal and Hyde; the little known sequel to the famous Robert Louis Stevenson novel.
Half the trouble is many agents do not know how to do referencing, many do not have an inkling of recognising a fraud and even more outstanding actually checking to see if the references they received are genuine, as above case! Going through the paper pushing motions is not referencing.
Never ever accept references from the tenant. You go get them and should always (were practical) a visit to where they live which is one of the best references you can ever get …… how they live.
Also take a look on Facebook. That adorable tenant, that butter wouldn’t melt can often be seen to be a real Jackal and Hyde.
The most shocking thing here is that the letting agent was, until this fraud, doing in house referencing. I know it was in Scotland but the let took place in 2019, not 1972!
If I were their landlord client reading this over my porridge oats, I’d be apoplectic. I’d also seriously be considering suing them for gross negligence. To my mind, referencing always needs to be double handed; both internal and via an external referencing agency.
Agreed …… referencing always needs to be double handed; both internal and via an external referencing agency.
We’ll done to Propertymark for highlighting this – It is a very real problem that even referencing providers are not set up to tackle. We’ve recently created a report asking agents ‘are you prepared for a rise in tenancy fraud? It highlights the challenge in more detail with the case study of a tenant we caught three times for three different agents.
*Well
Referencing is OK to an extent, sound judgement is another. But unfortunately most may be lost to the agent who just wants the commission and does not care about the repercussions. Maybe we need proper licencing and training of agents to protect a landlord.
The story above is Scotland which is licensed, as is Wales. Licensing proves nothing if the idiot doesn’t do the job right, a mind set.
£60,000 of arrears on one property is shocking and it’s unbelievable that our housing system allows a low life to rip off the agent and landlord and to possibly ruin the landlord’s life and finances.