Agents alerted over fake ID tenant scam

Agents and landlords are being warned about a scam, whereby phoney tenants take out tenancies in blocks of flats where post is delivered and left in communal areas.

The fake tenant then goes through the occupants’ post, stealing their IDs and using their credit cards and banks to buy expensive goods.

The fraudulent tenant is likely to have produced convincing ID checks and references, fooling the agent or landlord, and to have paid the deposit and advance rent without trouble.

However, the tenant’s ID will have been stolen and the money will have been paid via a debit or credit card belonging to someone else.

Tom Costley, of Barlow Costley agents in Swinton, Lancashire, was recently hit by such a scam.

“I did not believe there was any problem when I moved the tenant into a property in early December,” he said. “There was certainly no problem with the references.

“The first I knew anything was wrong was when I got a call from police to say they had found a set of keys belonging to my agency during a raid on another property, about ten miles away in Bury.”

During that raid, police apparently discovered a large number of high-worth items, including iPads and iPhones, apparently all bought with stolen credit and debit cards, and awaiting export where they would be sold abroad.

The keys were returned by the police to the agent who identified them as belonging to the flat he had let.

Barlow Costley was then approached by the tenant in question, who asked for another set of keys, claiming to have lost the first. But when told by the agents that the police wished to speak to him, he fled in a taxi and has apparently not been seen since. The police investigation is ongoing.

In the block of flats concerned, the fake tenant had managed to steal the identities of three of the six occupants, much to their distress.

Barlow Costley has also since been approached by the debit card company and told that the ‘tenant’ had paid via a stolen debit card, and that the true holder had noticed the large sum of money going out of their account and wanted it refunding.

At the block of flats itself, Barlow Costley had to put a 14-day abandonment notice on the flat concerned and change all the locks.

Costley has been told the incident was almost certainly part of a huge and widespread fraud where the modus operandi is for the fake tenant to enter into a tenancy in the usual way for a flat, furnished or unfurnished, arousing no suspicions. However, the tenant generally stays only for one or two nights, leaving as soon as he or she has accomplished their true purpose.

“Apparently this is going on all over the place and is a very smooth set-up,” said Costley.

Fortunately, in this case, Barlow Costley had organised comprehensive cover for their landlord, who will not be out of pocket as a result.

Costley is uncertain whether this particular incident could have been prevented in view of his firm’s already tight procedures but he has now tightened them up even more.

He said: “We now insist that anyone who wants to pay by debit card or credit card must come to our office to do so. If we have them in front of us, then we will be covered by the card providers’ insurance. We also absolutely insist on photo ID and will make no exceptions.”

Michael Portman, managing director of the specialist firm Let Insurance Services, which covered the landlord in this particular instance, said he is getting anecdotal information from across the UK of a rising number of deliberate fraud cases.

He said applicants fill out tenancy application forms fraudulently as they move from property to property, with no intention of keeping up with the rent. It is not unknown for this to happen within the same small town.
 
He said fraudulent tenants often give false information on where they have been living previously to throw referencing companies and letting agents off the trail. He added that they are also very difficult to evict as they seem to know their way around the legal system.
 
Portman said: “Tenant fraud is a growing problem for agents and landlords alike. It is essential that agents have a checklist for new tenants that includes obtaining ID documents and proof of current residency at an early stage of the tenancy application. 

“Agents need to be alert for anything unusual that could increase the risk for the landlord.”
 
He said that if agents had any doubts, they should talk to staff at letting insurance firms.

He said: “They are removed from personal contact with the prospective tenant and are trained to spot anomalies, oddities and the potential for fraud in tenancy applications.”