Top Tips for Spotting Scammers

As a landlord, you are uniquely vulnerable to fraudsters – from insurance scams to house theft. Find out what to look out for and how to protect yourself.

You don’t live in your property, so there’s no way of knowing what could be going on under your roof – from domestic abuse to drug addiction. You could also inadvertently rent to a fraudster and not a legitimate tenant.

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Scams you could fall victim to include:

• Mule address. Your property could be used as the address for a mule account that criminals use to launder money. They may even use your name too
• Unencumbered vulnerability. Criminals target unencumbered properties (properties that are owned outright, with no mortgages or loans secured against it), whose owners live elsewhere, to fraudulently sell on
• Insurance fraud. Criminals may pose as the homeowner of your property, take out insurance on it and then deliberately cause damage to get the insurance payout. They would then move on, leaving you to deal with the damage
• House loans. Once again, posing as the homeowner, criminals could take out loans against your property, leaving your investment in jeopardy when they default on the loan
• Identity theft. Is there anything in your properties that would provide enough info for a fraudster to steal your identity? Be very careful where you store sensitive documents and information 
• Cannabis farms. Some criminals will rent out a home simply to farm cannabis. This is not only illegal, but it can severely damage your property and you will have to wait until the police are finished investigating before you can fix it and get it back on the rental market. If it hits the news, it may put future tenants off
• Let-to-let. While there are perfectly legal companies offering let-to-let deals, there are some criminals taking advantage of this legal activity, by posing as legitimate agents and then offering the property as a HMO, usually to more people than can comfortably fit and not getting the licences and legal documentation required – leaving landlords liable. 
• Dodgy agents. Similarly to the let-to-let scams, some criminals will pose as agents, pocketing a fee from you and leaving you liable as they fail to protect deposits and ensure the legal requirements are met

How do you spot a scammer?

Unfortunately, they don’t wear masks or carry swag bags like in the cartoons, so there is no easy answer, but there are a few things to look out for:

• The small print. There’s a general idea that fraudsters are stupid and can’t spell – but often, the spelling mistakes you see in scam texts and emails are deliberate. They are targeting people who don’t look too closely and miss little details – these people are easier to scam. So when meeting a new agent or tenant, make sure they know you’re checking the fine print
• Let them know you’re hands on. Don’t be a hands-off landlord. Arrange quarterly checks with your tenants and let them know about this up-front – if they’re not a real tenant and they’re actually just looking for a new location for their next cannabis farm, they’re going to be put off by the thought of a hands-on landlord who’ll rumble their activities sharpish
• Odd behaviour. Is your tenant wary of referencing? Perhaps they’re trying to organise things outside of Mashroom? Ask yourself why – there’s no saving to be hard by not doing things via Mashroom and what could they be worried might come up in their reference?
• Gut instinct. We recommend always meeting your tenants first. It’s always good to have a personal relationship with the people in your property, but your gut instinct is also something you should listen to

How can you protect yourself against scammers?

Scammers today are sophisticated and their cons are ever-changing, but there are a few things you can do to stay one step ahead:

• Stay up-to-date. Keep an eye on the news as you will often hear of new scams there and know what to look out for. Join an online landlord community forum, where you are likely to hear more about landlord specific scams
• Do your research. Whether you’re working with a new agent or have just received a call from your bank, ask as many questions as you can. Do your due diligence and find out more about the agent/service/product before you sign up
• Know your rights. Try to be as informed as possible so you can spot red flags. For example, your bank would never ask you to transfer money into a brand new account and wouldn’t ask for your pin number. As a landlord, you need to get a gas safety check every 12 months – if your tenant is refusing you entry for these, they could be up to no good
• Be aware of number spoofing. We all know that criminals can now ‘spoof’ numbers so it really does look like your bank is calling. But did you know they can now keep the line open, so if you try to call your bank – you’ll just get through to the scammer again? Be sure to use a different phone to call your bank back
• Always reference. Refusing to rent your property without a reference is another indicator to a criminal that you are likely to spot any criminal activity and should be avoided as a potential victim

Ultimately, you need to be observant. The world is incredibly fast paced and it can feel like there’s a million things to do every day, but criminals rely on this distraction to con you, so be as focused as you can!

And don’t forget, you can catch our webinar with fraud prevention expert Tony Sales on our dashboard.

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