Propertymark wants agents to come forward with examples of fraudulent tenancy applications - a growing problem in the rental sector.
A statement from the ARLA wing of Propertymark says fake bank statements, references and payslips are increasingly common meaning agents are at greater risk.
Propertymark member agency Tay Letting saw a tenant submit fraudulent bank statements, income tax returns and a credit check, and ultimately obtain a high-end property in 2019.
With the eviction ban in place across Scotland for over a year, the tenant was able to live rent free for several months, until finally evicted this summer with over £60,000 of arrears.
Lorna Taylor, director of Tay Letting, says: “To guard against these fraudulent applicants, we now send all applications to an independent referencing agency as a matter of course to verify as far as possible that the information we have received is legitimate.”
Propertymark says agents have noted some effective ways of spotting fraudulent activity, including:
- Checking whether the applicant is a director of a company by using the Companies House website for details including how long ago the company was incorporated, and whether it has filed annual accounts;
- Scrutinising bank statements to check the applicant’s income and expenditure. The statements reflect a real person living their life;
- The use of open banking allows a tenant to securely share their financial information with a referencing agency which validates bank statements and checks if the bank balances match up.
Propertymark says it’s working to ensure that all governments across the UK are aware of this issue and to make sure that landlords can easily recover properties where it has been established to have been let under a fraudulent tenant application.
“Fraudulent tenants who are acquiring often high-end properties fully knowing they cannot afford them is a growing problem which needs immediate attention” explains Propertymark chief executive Nathan Emerson.
“With the increase in cases and the sophisticated ways these people are producing falsified documents, agents can be completely unaware of this fraudulent activity until faced with the devastating consequences. Agents should remain vigilant and do all they can to weed out the criminals from the law-abiding tenants.”
Agents who have experienced fraud are invited to send examples to Propertymark in order to form a clearer picture of what and how fraudsters are operating: agents should email firstname.lastname@example.org.