Fraudulent Rental Property Applications Rising

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The number of fraudulent rental applications from prospective tenants is rising considerably in 2019 according to research by lettings and estate agent Benham and Reeves.

A further problem is the sophistication of the forged documents and tactics being used for fraudulent applications.

Using data from their referencing agency, LetRef, Benham and Reeves found an average of six fraudulent applications per 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, it has already hit an average of 13 per month – a 117 per cent increase each month.

With the recent introduction of the Tenant Fee Act 2019 meaning landlords and 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. In June, the number of fraudulent cases has already increased to 16, above average despite the short time the ban has been implemented. 

The quality forged documents used in the applications has also increased, as fraudsters become more sophisticated.

There has been a marked increase in the number of fake passports being used by fraudsters. In 2018, there were a total of only 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.

Marc von Grundherr, Director of Benham and Reeves, commented: ‘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.

‘Unfortunately, the majority of referencing companies do not even collect ID and proof of address and conduct referencing as a side-line, in order to up-sell other services and earn commission.

‘Letting agents using one of these companies or making checks themselves are highly likely to end up with these fraudulent chancers flying in under the radar and into a rental property.’

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