Tenant Application Fraud Rockets by 140%
Landlords, did you know there’s a brand new fraud that you need to be aware of?
If you’re looking to expand your portfolio, let us know – we’ve got the right person to help you!
We’ve covered fraud and other rental crimes before – from mortgage deceptions to weed farms right there in your property. But now the cost of living crisis is seeing another very particular fraud rise up.
What is this new fraud?
So what is this new fraud that you need to be aware of?
Well, GoodLord found that there has been a 140% increase in fraudulent tenant applications between 2022 and 2023. They looked at 300,000 cases from cases in each year and found there while there was 1.2 cases of fraud per 1,000 applications in 2022, there were 2.9 cases per 1,000 applications in 2023.
This timing suggests that this is linked to increasing competition between potential tenants.
The data gathered by GoodLord shows that the most common fraudulent tactic is manipulating payslips, either by increasing their monthly income or changing the source of income. These are then given to the landlord as ‘proof’ of their ability to afford the rent.
What to look out for?
There are a few ways that a tenant can commit fraud when applying to rent your property.
- Payslip manipulation. The data gathered by GoodLord shows that the most common fraudulent tactic is manipulating payslips, either by increasing their monthly income or changing the source of income. These are then given to the landlord as ‘proof’ of their ability to afford the rent. This usually means that the margins are in fact much much narrower than the landlord would be comfortable with and it could very quickly result in rent arrears.
- Fake references. You’ve probably seen this tactic in your favourite TV show, with a character putting their friends down as references and it’s the same thing – a tenant will provide glowing references from previous landlords, that are completely faked. While some tenants could do this simply to get ahead of the competition, there is a darker possibility that they’re covering their terrible tenant past and could potentially leave you with a tenant who damages the property and doesn’t pay the rent
- Fake ID. Criminals could use false IDs to get access to properties to use for criminal activities. This is a incredibly stressful position to find yourself in as a landlord and can take a long time and a lot of money to resolve.
How can you protect yourself against fraud?
Finding a tenant can be stressful in and of itself, even if you have the ‘nice problem to have’ of too many applicants. If you have a day job, I totally understand the temptation to dash through the steps, make sure all your certifications are up to date, all of that… but dashing through the steps is how you could miss a red flag.
Fraud is becoming more sophisticated by the day, so it’s vital that you stop and examine things closely and trust your instincts. Ideally, working with an agent is an additional layer of security, as they will do a thorough reference check for you and ensure that everything is above board with your new tenant.
If you’re not currently working with an agent or looking to change your agent, book a call and we’ll be able to help you out!
What is behind the rise of this fraud?
The timing of this increase indicates increasing desperation to secure a property by tenants, at a time when we are hearing about demand outstripping supply.
As GoodLords Head of Referencing Nishma Parekh said:
Given the current pressures on the housing market, it’s understandable as to why we’re seeing a rise in this type of fraud.
However, if you are a tenant watching this – please don’t think this is a shortcut to securing your next home. You are HIGHLY likely to be found out, especially if you falsify payslips and can actually not really afford the rent, and then you’ll find yourself on the National Fraud Database.
This could impact so much, from your future job prospects to securing loans in the future, including a mortgage. So don’t let your desire to secure a home NOW scupper your chances to own a home in the future.
Have you ever experienced rental fraud or have you dodged it recently? What were the tell-tale signs landlords should look out for? Let us know in the comments below.
