The UK’s largest referencing group reports a 10% rise in fraudulent tenancy applications

The UK’s largest referencing group reports a 10% rise in fraudulent tenancy applications

10 May 2022

The latest figures from Barbon, the UK’s biggest tenant referencing company, including HomeLet, Let Alliance and Rent4sure, reveal the extent to which tenancy application fraud is rising.

The group completes a million tenant references a year.

Chief Executive Officer Andy Halstead warned that application fraud has spiked over the past 18 months, with fraudsters becoming smarter at a time when the UK is facing the biggest income squeeze in nearly 50 years.

“The volume of alerts on applications is continually increasing, and in the last 12 months alone, we’ve flagged over 50,000 suspicious applications,” he said.

“As demand for property soars and rental prices rise, tenancy fraud is becoming more profitable and many more chancers want to get in on the act. They’ll use any opportunity, and we’re seeing increasingly sophisticated methods being used to try to obtain access to properties to support criminal activity or sublet illegally.”

The biggest risk to customers is fraud, but with a legacy going back nearly three decades and a cohort of around 150 experienced referencing specialists across Barbon’s three brands, there’s little that Halstead and his teams can’t handle.

Knowledge and data are shared across the group, significantly reducing the chances of a fraudulent application getting through. Hundreds of applications are flagged every single month, whether that’s for a relatively small issue needing a review and further checks or something more serious that requires in-depth analysis to resolve.

HomeLet’s latest Rental Index data for April 2022 shows that the average UK rent for a new tenancy has risen to £1,091 per calendar month, up by 9.5% from last year.

Rising rents and the cost of living crisis are just two factors helping to increase the pressure on household budgets, said Halstead.

“Unfortunately, this could mean that some tenants present a higher risk. Add rising fraud data into the mix, and the situation becomes a perfect storm.”

Typical red flags agents should be aware of when approached about a tenancy include:

  • looking to move very quickly
  • offering large amounts of rental payments upfront
  • trying to avoid going through the referencing process

Some potential tenants may attempt to cover up issues such as County Court Judgements or adverse credit history. They may try to over-inflate their income or intend to sublet. Potentially, these are people who won’t necessarily be able to afford the property and are at a higher risk of running into rent arrears, so rigorous scrutiny is essential in preventing fraudulent applications from getting through.

Halstead is urging agents to help mitigate the risks and protect their landlords by using high quality, trusted referencing checks from a professional partner.

“Referencing tenants is the first line of defence, and our experience, expertise and procedures help keep customers safe.

“We’re continually optimising our checks, which mix technology with the most experienced team in the market. We call it ‘Intelligent Referencing’ for a reason.”

With a number of complex individual parts making up the referencing process, it’s essential to combine the right blend of technology and data points alongside expert input from highly trained professionals. It’s a tried and tested hybrid approach, developed through nearly 30 years’ experience within the lettings industry.

Never content to stand still, CEO Andy Halstead ensures that the process evolves as it needs to: “It’s amazing the lengths some people go to commit application fraud but as the fraudsters try different things and get smarter, or at least think they do. We’re here fine-tuning our methods exactly as we need to so we can keep on protecting our customers.”

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