Propertymark says it wants to strengthen its message to government with a view to addressing this issue, and is asking agents to email firstname.lastname@example.org.
Propertymark says that falsified bank statements, references and payslips are some of the documents that are now appearing more legitimate meaning agents are at greater risk of falling into a dangerous trap.
A recent case study presented to Propertymark by member agency, Tay Letting, which has branches across Scotland, saw a tenant submit fraudulent documents, including bank statements, income tax returns and a credit check, and ultimately succeed in obtaining 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 being evicted this summer, having accrued over £60,000 of arrears.
Lorna Taylor, director at Tay Letting, commented: “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.”
Arrears can continue to accrue for months on end and given the current Covid-19 regulations which provide additional protections, these tenants are continuing to live in the property without making any rental payments leaving landlords to pick up the costs. 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 looking to see how long ago the company was incorporated, and whether it has been filing annual accounts.
- Scrutinising bank statements to check what the applicant’s income and expenditure looks like. As most people receive their salary into their current account there should be at least some evidence that 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 their bank statements and checks to see if the bank balances match up.
Propertymark is working to ensure that all governments across the UK are aware of this issue and to make sure that landlords can easily recover their properties where it has been established to have been let under a fraudulent tenant application.
Nathan Emerson, Propertymark’s CEO, commented: “Fraudulent tenants who are acquiring often high-end properties fully knowing they cannot afford them is a growing problem which needs immediate attention. 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.”