Landlords Beware: fraudulent tenancy applications soar

There is little doubt that the pandemic and its consequences have fuelled a huge rise in fraudulent tenant applications. Fraudulent applicants often fill out tenancy application forms, giving misleading or inaccurate information, to secure rental property.

Often this fraudulent information includes fraudulent information on where they have been living previously. It’s also believed that people move from property to property with no intention on paying the rent.

According to tenant automation checks specialists Homeppl there has been a 263 percent increase in just three months.

Some of this fraud is professional, however it’s believed that amateur fraud is now fuelling this huge rise as a result of the pandemic.

Types of tenancy fraud techniques

Profession fraud has always been a problem, but it’s amateur fraud that has seen the biggest rise.

Many of the techniques used by fraudsters include the following:

• Fake IDs, including passports and driving licences.
• Fake email addresses and website to mimic employers references.
• Doctored documentation like bank statements, proof of address, payslips.
• Fake previous addresses.

Many of the amateur fraud taking place can be attributed to the pandemic, with people losing jobs or being on long term furlough. This fraud may well rise in the coming months as furlough ends and businesses struggle to pay salaries and more people lose jobs.

Fraudulent tenants – nothing new

Tenant fraud isn’t a new problem but is sharply increasing across the UK due to the impact of the coronavirus pandemic. But landlords should be even more vigilant and thorough with their checks because of the share rise in tenant fraud.

Subletting

Subletting is illegal that the Government has tried to stamp out. However, it’s becoming more of a problem also. This happens when your tenant sublets the property to another person at a profit, takes the other persons money, defaults on the rent to you and then will leave quickly, leaving you without the rent, a tenant not in contract with you and eventually the tenant becoming homeless. Subletting through websites like Airbnb has also become a problem.

It’s worth doing regular property checks and when you do, check that the occupier is still the same person that you let the property too.

How to combat fraudulent tenant problems

Landlords should have checklists for new tenants of the documentation they need such as ID documents, proof of current residency etc.

Having a comprehensive tenant referencing service to help you spot anomalies and the potential for fraud in all tenancy applications could be a vital support service for landlords.

Difficulties in evicting fraudulent tenants

Not only can fraudulent tenants owe you a lot of money, give you a lot of difficulties during their tenancy, but they often know their way around the legal system and can be difficult to evict.

Tips for landlords and letting agents to reduce tenant fraud

• Run a credit check on individuals,
• Request photo ID and check it carefully.
• Use a professional tenant referencing company to support you.
• Obtain references from employers, check out the companies and if possible, speak to them personally.
• Obtain references from previous landlords – although these may not be wholly helpful as landlords can write good references in order to get rid of bad tenants.
• Compare addresses on all the documentation and look for anomalies.
• Get copies of payslips and bank statements.

The key is to not take everything at face value, check and double check, ask questions, look for anomalies and trust your instinct. Refusing a tenant that doesn’t meet your strict checklist, even if you’re desperate for the property to be let, could save you a lot of money in the long term.

As tenant fraud is on the increase and likely to continue, all landlords need to be extra vigilant, do extra and regular checks and potentially use a professional tenant referencing company to give you additional peace of mind.

Also See: Forensic Accountants Save Businesses From Financial Frauds

About the author

Sumit Agarwal
Sumit Agarwal (ACMA ACA India), the Managing partner of dns accountants is a highly respected accountant with expertise in helping owner-managed businesses.