Securing a rental property has been a competitive pursuit for renters in recent years as demand continues to exceed supply.
With that competition comes the need for tenants to present themselves in the best possible light to landlords if they want to close the deal.
However, the lengths some potential tenants are willing to go to have taken a turn for the worse in the past year, amid a sharp increase in fraud, including the production of fake pay stubs.
The number of fraud among tenants increased by 141 percent last year compared to 2022, according to an analysis by experts Goodlord.
Some tenants are resorting to fraud to secure a new home amid a fiercely competitive rental market
It suggests that some tenants feel they have no choice but to take extreme steps to ensure they have a chance of getting a rental property.
Goodlord analyzed a sample of 300,000 rental applications from 2022 and compared this with a similar number last year.
In 2022, 1.2 fraud cases were detected per 1,000 applications. Last year that rose to 2.9 cases per 1,000, an increase of 141.6 percent year on year.
The most common form of fraud found in the data was paycheck fraud.
This is where tenants increase their income or edit the source of it, such as changing a business name.
And the methods used to carry out this type of fraud range from simple editing to the use of software, such as Photoshop.
The fraud does not stop with false pay slips. Other fraud cases picked up by anti-fraud experts in the past year include fake passport images.
Others flagged as suspicious in an application include payroll statements that do not match bank statements.
And there may also be employer references from companies that do not exist or forged documents using different fonts.
Last year, Goodlord claimed that payslip fraud was responsible for 58 percent of all fraud cases discovered, and that just one of these could cost the agent a lifetime landlord’s worth of £10,000.
While reference teams can be trained to spot inconsistencies in tenant applications, fraud can also be detected using Open Banking and AI tools, which can help identify repeat offenders.
What happens if an application is fraudulent?
In addition to blocking an application, any fraudulent information or documents provided by a potential tenant are “recorded internally for future reference” so that any future incidents can be picked up quickly, Goodlord said.
Data from tenants involved in confirmed fraud will also be added to CIFAS, the national fraud database.
This could have serious consequences for applicants if they try to apply for certain types of funding in the future.
Data from tenants involved in confirmed fraud will be added to the national fraud database, which could have serious consequences for applicants if they try to apply for funding in the future
Nishma Parekh from Goodlord said: “Fraud can take many forms. In some cases, renters desperate to secure a home think that increasing their salaries will help seal the deal.
‘Given the current pressure on the housing market, it is understandable that we see this type of fraud increasing.
‘However, this is not advisable as you could end up on the National Fraud Database, which could affect your future job prospects and other life events, such as obtaining loans.
Given the current pressure on the housing market, it is understandable why we see this type of fraud increasing. However, this is not advisable as it could put you on the National Fraud Database, which could affect your future job prospects and other life events, such as obtaining loans.
Nishma Parekh – Good sir
‘And of course fraud also has a much darker side, such as criminals using fake IDs to secure property, or people trying to sign leases using forged documents.
‘As the tools used to commit fraud become more sophisticated and personal information becomes increasingly digitized, it is critical that landlords and agents have access to cutting-edge technology designed to fight back – technology that can protect them and ensure that they can rent out their properties. good faith.
‘Through integrations with payroll providers, HMRC, the fraud database and Open Banking, skilled teams and technical solutions are helping to tackle fraud, making it increasingly difficult for bad actors to game the system.’
It comes amid a sharp increase in rental prices since the start of the pandemic.
Among the latest findings, Zoopla suggests that rents have risen by 29 per cent since just before the start of the pandemic.
Although the rate of growth in rental prices has slowed over the past year, they are still significantly higher than four years ago, the real estate website said.
The average rent in Britain was £948 per month in January 2020 and has risen to £1,223 today, the property portal said.
> Are you, as a landlord, a victim of rental fraud? Contact: myra.butterworth@mailonline.co.uk
