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Landlords beware: fraudulent tenant applications are on the rise

2-minute read

Mollie Millman

16 July 2019

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The number of tenants using fraudulent information to secure a rental property has soared in the past year, new figures have revealed.

New statistics suggest a marked increase in fraudulent lettings applications, up 117 per cent a month.

In other words, they’ve risen from six per month in 2018 to 13 per month during the first six months of this year.

These fraudulent applications involve prospective tenants using either fake bank statements, or faked or cloned employers.

Rental properties used for criminal activities

The research by lettings agent Benham and Reeves claimed that fraudulent applications were being used to secure rental properties for criminal activities.

These criminal activities include sub-letting properties to holidaymakers at an inflated rent, often paying no rent themselves and vanishing once the bailiffs show up – taking the entire contents of the property with them.

Other activities include using the property as a brothel or drug den, both of which can cause considerable damage.

Tenant fees ban takes its toll

Benham and Reeves suggested that numbers would continue to increase due to the ban on tenant fees introduced last month.

With agents no longer able to charge tenants for reference checks as a result of the ban, those applying for a rental property know it won’t cost them a penny if they fail the checks, with landlords left to foot the referencing bill.

At the same time, the research found that the number of faked passports has increased from five reported cases last year to 11 cases reported already in 2019.

Marc von Grundherr, Director of Benham and Reeves, said: “This surge in fake applications is a very worrying statistic.

“It’s the professional duty of all letting agents to properly validate the tenants they are providing to their landlords and failing to do so with the utmost vigour simply isn’t acceptable.”

What can landlords do to protect themselves?

One way landlords can help to guard against the possibility of fake applications is to check that their letting agent is using a legitimate referencing company.

Referencing companies are there to make sure the proper checks are made, including collecting and verifying identification and proof of address.

Anti-money laundering (AML) checks help to ensure that potential tenants are who they say they are – and aren’t applying on behalf of someone else.

Expert forgers making it worse

Benham and Reeves claim the increase in fraudulent cases is being helped along by a number of expert forgers who know the code formatting required to pass an AML check.

A thorough referencing process that cross-checks information can help to identify these fraudulent applications – and may mean landlords employ their own referencing company to carry out additional checks.

Have you refused potential tenants because they failed their referencing checks? Tell us more in the comments below.

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We create this content for general information purposes and it should not be taken as advice. Always take professional advice. Read our full disclaimer

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