Growing numbers of amateur scammers led to a 263% rise in the value of fraudulent tenant applications during the past three months, reports due diligence and guarantee firm Homeppl.
It says that if left unchecked, this severely impacts landlords and estate agents leading to potential long-term periods of rent or property damage.
Its fraud detection tests identified that 2% of all tenant applications were fraudulent in the first quarter, with the value of these applications three and a half times higher than Q4 last year.
One in 50 of all tenant applications handled by Homeppl was fraudulent and, in parts of London where properties fell into the high value bracket, this rose to one in 20 of all applications.
In these locations, it often uncovers professional fraud, when the tenant tries to take possession of a high value property and sublet it through short-let sites such as Airbnb to maximise income while defaulting on the rent to the landlord.
CEO and founder Alexander Siedes (pictured) says common techniques used by amateur fraudsters are fake IDs – including passports and driving licences – and doctored documentation including 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.
He says: “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.”
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