There’s been a huge 263 per cent increase in the value of fraudulent tenant applications in just three months, it’s been claimed.
Homeppl, a tenant due diligence and guarantee firm, says agents have to be on high alert; the firm’s detection tests suggests two per cent of all tenant applications are fraudulent. In some areas it’s five per cent.
While professional fraud remains a problem, it’s amateur fraud that has seen the biggest rise, in most part as a result of the pandemic.
Common techniques used by amateur fraudsters are fake IDs, including passports and driving licences, and doctored documentation such as payslips, bank statements, letters of employment, proof of address and proof of study, as well as fake email and websites to mimic employers and references.
Alexander Siedes, chief executive of Homeppl says: “One in 50 of all tenant applications we handled in Q1 2021 was fraudulent. But this was even more prevalent for particular clients as a result of the areas they work in and their client demographic.
“For one of our London-based clients, where there are high value properties and a broad tenant demographic, one in 20 of all tenant applications were fraudulent.
“Due to the location, a lot of this was professional fraud - when the tenant is attempting to take possession of a high value property and sublet it through short lets sites such as Airbnb to maximise income whilst defaulting on the rent to the landlord.”
Siedes adds: “Amateur fraud occurs when tenants aren’t earning enough to afford the property and this type of activity seems to have risen as a result of the pandemic which could be due to tenants being on furlough or losing their jobs.”