Agents - how to spot and stop fraud

Alexander Siedes, CEO of Homeppl, reveals the top five ways people try and commit tenancy fraud and how to spot and stop it.

Tenancy fraud is a growing issue in the UK - one in every 50 tenant applications is fraudulent, rising to one in 20 in London. There are many reasons why individuals want to rent properties fraudulently - professionals are generally looking to take possession of a high value property and illegally sublet it, often as a way of laundering cash, while amateur fraudsters are misrepresenting their finances to rent properties they cannot afford. But whatever the reason, the result is the same - the landlord is left open to huge financial and legal risk.

Here are five tactics used to commit tenant fraud and top tips on how to spot it and stop it.

Fake identity

One of the most common ways tenant fraud is being committed is by using fake IDs - either by presenting an entirely fraudulent document or by stealing someone else’s ID and then renting the property using that person’s name.

Top tip

Cross-reference driving licences and passports with external sources to establish not only if the ID being represented is legitimate, but also, if it actually belongs to the person presenting it. Sounds simple, but the volume of fraudulent tenancy applications is on the rise and this is the easiest way for fraudsters to kick-start the process.

Doctored or fake bank statements

A method generally used by amateur fraudsters is to exaggerate their income - and therefore their ability to afford rent. But, this is also used  by professionals to create a ‘legitimate’ income source.

Top tip

Check if the PDF has been modified since it was created - if it has, this could suggest the data on the document has been tampered with. Some fraudsters employ sophisticated methods to tamper with documents, so leveraging technology is key in spotting dodgy statements.

Bogus references

A key part of the tenant referencing process is obtaining references from employers and previous landlords. To bypass these checks, fraudsters are not only creating fake references, but entirely fake businesses too. They are purchasing domain names, creating a business website with corresponding email addresses, and then providing these as references. This allows the fraudster to have complete visibility over the referencing process as they are receiving reference emails as part of the process, ultimately meaning they can fulfil their own reference.

Top tip

Check the age of the website to establish if it has been created recently, this could suggest it has been built simply to provide a reference. If it’s a really new website this could raise a red flag, but do note that there will always be legitimate new sites created so all references should be treated carefully.

Modified payslips

Another method for exaggerating pay or creating a fake reference is to provide doctored or counterfeit payslips. Now that most payslips are digital, fraudsters are able to - as with bank statements - amend these online and create a new version that looks exactly like the original, but with a higher level of pay. Others create entirely fake payslips from fake employers.

Top tip

A business check with Companies House will ascertain, firstly, if the employer on the payslip exists, and secondly, if it is financially viable - if the business has been registered simply to act as a reference, it will have no filing history. Always harness credible, third party records to sense-check how viable the details provided are.

To sum up…

It’s clear, fraud isn’t going to stop in 2022. In 2021 we only saw it grow. This means it’s more important than ever that you stay ahead of the scammers to protect both your agencies’ revenue and reputation, as well as your landlords’ houses.

However, although fraudsters are getting smarter with better tech, there are plenty of ways to outsmart them too. Using both human and tech intervention means you can stop the frauders in their tracks!

For more information on catching fraud, you can visit homeppl.com.

*Alexander Siedes is CEO of Homeppl