Tenancy Application Fraud Rockets By 140%
A sharp rise in rental market competition is fuelling a surge in tenancy application fraud, according to new data.
An analysis by tenant referencing firm Goodlord found a staggering 140% increase in tenancy application fraud between 2022 and 2023.
The most common tactic involves manipulating payslips, with applicants either inflating their income or altering the source entirely.
Goodlord compared more than 300,000 applications from each year, revealing a jump from 1.2 cases of fraud per 1,000 applications in 2022 to a concerning 2.9 cases last year.
‘Tenants who are desperate to secure a property’
The firm’s head of referencing, Nishma Parekh, said: “Fraud can come in many forms. In some instances, tenants who are desperate to secure a property think bumping up their salary will help seal the deal.
“Given the current pressures on the housing market, it’s understandable as to why we’re seeing a rise in this type of fraud.”
She added: “However, this is inadvisable as you could end up on the National Fraud Database, impacting future job prospects and other life events such as securing loans.”
Fake IDs and forged documents to rent a home
The rise in digitalisation also presents new challenges as criminals are using increasingly sophisticated methods, including fake IDs and forged documents to rent a home.
To combat this growing threat, Goodlord says that robust referencing practices are needed.
Plus, it warns, landlords and agents should use technology like Open Banking and AI-powered solutions to detect inconsistencies and prevent fraud attempts.
Investing in skilled referencing teams trained to identify red flags in a tenant’s application is also crucial.
Criminals using false IDs to secure properties
Ms Parekh warns there’s a ‘darker side’ to tenant fraud with criminals using false IDs to secure properties, or applicants looking to sign tenancies using forged documents.
She said: “As the tools used to commit fraud grow more sophisticated and personal information is increasingly digitised, it’s vital that landlords and agents can access the cutting-edge technology designed to fight back – ones that can protect them and ensure they can let their properties out in good faith.”
Various tie-ups with the likes of HMRC, payroll providers, HMRC, the fraud database and Open Banking, means experts can tackle tenant fraud to make it difficult for fraudsters to game the system.
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