More fraudsters getting through referencing nets as fake tenants game the systems

Tenancy application fraud is sharply on the rise, it has been claimed.

More tenants are being turned down by some referencing firms, but there is evidence that fraudsters are effortlessly getting through some systems.

They include repeat sub-letters; people who have faked bank statements; those with made-up jobs and whose employers are non-existent; and applicants who should not even be in this country.

The warnings come from Tony Williams, managing director of UKtenantdata, which operates a number of services for agents including tenant screening.

Williams said that some new cheap referencing firms have emerged which claim to offer due diligence for £5 or less.

He said: “I was interested at how these companies can knock out quality reporting covering off all the due diligence processes at a fraction of the cost of firms like ours.”

He said he had researched two companies providing referencing services at under a fiver – one in the south and one in the north – “and it became apparent that our due diligence processes and theirs were poles apart”.

Williams said that these cut-price services actually do little more than provide tenants with a self-certification process.

He said: “This isn’t due diligence and exposes decent agencies and their clients through clever marketing to problems down the line.”

He said investigation into some of the tenants ‘cleared’ by the cut-price referencing firms found: serial sub-letters in London; applicants with non-existent employees; and overseas nationals with no proof of residency or a visa long spent.

Williams said his own firm is having to turn down more fraudster applicants.

He said: “As a tenant vetting agency we do have to decline individuals – for example, where there is adverse court data, failed accommodation references or a shortfall in rental affordability.

“What is a worry is the increase in blatant fraudulent applications which range from doctored salary slips and bank statements to the complete ID theft.

“This blatant fraud adds up to 34% of our total declined applicants, up 16% on our 2016/17 data.”

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16 Comments

  1. Light

    I hope Tony Williams paid for this advert. No evidence and too afraid to call out the companies…

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  2. Property Poke In The Eye

    These articles promoting own interests should be banned on PIE as they are normally very biased in order to generate business for themselves.   They should be labelled -Advert.

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    1. CountryLass

      Or Sponsored/Promoted etc.

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  3. UKtenantdata

    This really isn’t about self-promotion, it’s to bring some semblance of awareness to the industry that what something says on the tin isn’t necessarily what’s inside. Obviously as a company offering five pound referencing and reading this article it would be natural to expect a negative response, although it’s early days and I would welcome a response from any of these companies with evidence to support their due diligence processes. Again this isn’t about self-promotion nor a witch hunt, it’s about raising awareness that this type of self-certified due diligence is simply not acceptable and exposes decent agents and their clients to unnecessary financial loss.

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    1. Will

      Had the owner of UKTenantdata drawn matters to attention without using the company name (self promotion) it could have avoided being accused of using PIE as an advertising media and still got its message out.   I personally do not believe anyone can do referencing for £5.00 and if people believe this is possible they, quite frankly, reach 10 out of 10 on the stupidity scale! If companies are doing as is being suggested they are little more than scammers and those affected should consider taking such companies for professional negligence.

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    2. Rayb92

      Is a reputable reference agency well placed to launch a Rogue Tenant Database that the industry is crying out for ?  I could see this being of huge benefit to the agency also as it would attract no doubt countless agents and landlords to use their services and register such tenants

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      1. DarrelKwong43

        I think there are numerous legal reasons why this cannot be done….
        Obviously, obtaining a CCJ against defaulting tenants is one way a landlord can help others in identfying potential bad tenants. 
        However appreciate lots of landlords do not want to spend another money going through the court system when its highly unlikely that they will any of the owed money or the court fees. 

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  4. ArthurHouse02

    I am interested though as to how you obtained proof that these companies are letting fraudulent applications through? If this is the case have you reported them to the police or Home Office?

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    1. Property Poke In The Eye

      Good point.

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    2. DarrelKwong43

      I think that was the essence of the post, that they were not doing *sufficient* due diligence.  I don’t think that is illegal, it depends on how the service is sold.

      If an agent believes they are getting a comprehensive reference for £5, then that is no different to a landlord being promised full management for 3%.  Its either shoddy/non existent management, or the agent is taking huge amounts of commission/fees from tenants or other services which they sell.

      I remember back in 1996, my first employer made us check the current property of the applicant to see how they were living. In those days, we were more concerned about condition rather than failure to pay the rent.   Today, an automated system is great for efficiency but picking up the phone, checking social media, and making sure all the dots join, is paramount, and if that costs a few more pounds, as a landlord I would be more than willing to pay that.

       

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  5. FUDGE53

    Good lord, I can certainly Vouch for the fact that Tony is correct.  You get what you pay and these so called cheap products will turn out to be very expensive.

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    1. NotAGuru71

      I nearly fell off my chair with those puns! Indeed you do get what you pay for, in this current climate (god i hate that phrase) agents will have to look for cheaper alternatives to what is available. While we are at it naming companies, take Let Alliance for instance, full global with right to rent is nigh on £20. So they data collect, data compile, hound existing landlord and employer etc for proof, take “copies” of a passport and proof of address etc and give you a lovely report indicating what they are like on paper. For those of you who think this “protects” you are absolutely deluded! Guess what, you still have to physically see the original passport etc to verify its real, thus completing your responsibilities. The £5 referencing does “most” of what let alliance does and you just polish the rest up, clicking a button or two to remind someone to complete the reference or employer etc doesn’t take more than a few seconds. The only difference is VOUCH will not call the employer or existing landlord, but even if they did, would that still ensure the person you are talking to is who they say they are? No. I would be happy for it all to be automated, the IP address of where the form was completed will act as a signature, much the same as an email address with IP is valid for signing a contract! There is no 100% safe option, but the best of both for me is just as good as.

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  6. Peter

    You pays your money!

    Agents have to be alert and diligent themselves and should not solely rely on referencing companies processes, even those that have better systems and are more likely to pick up on issues.

    I have picked up on discrepancies that the referencing company could not.

     

     

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  7. Lil Bandit

    Another shameless company plug hidden behind a ‘informational’ article. More real stories and transparency needed on PIE!

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  8. Nick Salmon, M.D. Property Industry Eye

    Just to be clear – again – no company or individual can purchase editorial space in the news column of EYE. If we bring you a story that contains an element of promotion (almost inevitable in many cases because the writer or source or quote is from an industry supplier) then that is because we consider that the story or opinion has genuine news value. You may not always agree with our choices but the judgement call on a particular piece is always made with its news value in mind.  

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  9. Andy Halstead

    Here is my article on this subject, published last week;

    https://www.linkedin.com/feed/update/urn:li:activity:6460422948451950592

     
    I do believe it is newsworthy and in the interest of professional letting agents to be aware of the risks associated with short cuts or ‘to good to be true’ pricing. I have commented on PIE regularly stating that it is simply impossible to provide a comprehensive, quality reference for £5.00 and to date no one has produced anything that suggests my challenge wrong………
     

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