Posts with tag: fraud

Landlords and letting agents are being warned to be even more vigilant when on the look our for fraudulent rental applications.

London agent Benham and Reeves has highlighted an increase in the recent level of fraudulent activity. According to the data they received from their referencing agency, LetRef, an average of six fraudulent rental applications were received each month in 2018. This includes some that used a fake bank statement and others that used fake or cloned employers in order to pass the reference checks.

Looking at the data so far for 2019, the agent has already seen an average of 13 fraudulent rental applications per month. Benham and Reeves also pointed out that in June, the month the Tenant Fees Act came into force, the number of cases increased to 16.

Marc von Grundherr, Director of Benham of Benham and Reeves, commented: “This surge in fake applications is a very worrying statistic for a rental market that is already straining under the current requirements of ‘generation rent’ and this increase demonstrates the importance of using a bonafide referencing company, where staff have been given specialist training from the National Crime Agency on recognising fraudulent documents.

“Unfortunately, the majority of referencing companies do not even collect ID and proof of address, and conduct referencing as a sideline, in order to up-sell other services and earn commission.

“Letting agents using one of these companies or making checks themselves are highly likely to end up with these fraudulent chancers flying in under the radar and into a rental property.”

Similarly, Paul Shamplina and his team at Landlord Action is raising awareness around such issues in tonight’s episode of ‘Nightmare Tenants Slum Landlords’. The key message this time is that there is a need for better fraud detections when it comes to referencing.

Paul Shamplina says that letting agents and referencing companies will benefit in the future from investing in technology with the means to validate tenants’ financial means and payment histories.

In tonight’s episode, we hear from pensioner and widow Marilyn Hunter. She was under the impression that her family home was being let to a ‘house-proud’ mother and daughter, who would look after the property as she would herself.

Marilyn said: “I’ve been letting the property for 12 years with very few issues. I have always used a letting agent, as I did in this case, and they use a third-party tenant referencing company. 

“At first, everything seemed to be going well, I had visited the tenants, they were very friendly, and the property was being beautifully kept. Then the rent payments started falling behind.”

After speaking to the tenant, they were very apologetic and brought the payments up to date. However, things got worse when neighbours reported suspicions that there were more people living at the house than agree in the tenancy, which turned out to be true.

Marilyn spoke to the tenants, informing them that, due to late payments and dishonesty, she would have to ask them to leave, but was happy for them to stay until they found somewhere else. Ten months later, rent payments were still coming in late and often incomplete, and the tenants were becoming increasingly hostile. At this point, Marilyn got in touch with Landlord Action.

Marilyn said: “The references obtained suggest the tenant earned £54,000 a year, which we now believe was a fraudulent claim. We have since learnt that the tenant has set up several ‘businesses’ registered with companies house, took out a magazine subscription in my name which I’m being asked to pay, and I have received a box full of letters chasing for money.

“We still receive threatening visits from debt collectors trying to track her down. I am now £10,000 in debt myself as a result and am going to have to try, over time, to reclaim some of the money through attachment of assets.”

Paul Shamplina commented on Marilyn’s case: “Sometimes landlords can think they have taken all the necessary precautions but still end up in a difficult situation. Technology has made it easier for people to falsify documents, which is why letting agents and referencing companies need to invest in even smarter technology which improves fraud detection.

“Landlords should also ask questions, ask to see the full referencing report and take time to grill down any information which does not appear to stack up.”