Fraudulent activity in the referencing process is on the rise – What can be done to combat this?
Fraudulent activity in the referencing process is on the rise in the UK. Whilst no Landlord wants their property left empty the cost of moving in a tenant that isn’t who they say they are could be high! It’s worth doing the right due diligence up front to prevent a long-term headache! Here we look at some ways the risk can be reduced.
Tip 1: Checking the identity of your applicants is a key step in the referencing process.
You should make sure that the picture in their ID matches the person standing in front of you. Make sure you properly look at them and the ID. Think about the date of birth on the ID, how old does this make the person and does your applicant look this age.
Whilst fraudulent documents are not always easy to spot, you can double check that the fonts and colours match the official list of documents that you can find on the government's site.
Tip 2: Ask Questions.
Ask questions and listen to your applicant's story. How much do they earn and what's their job? Is the property in line with what you would expect for their circumstances, i.e. a single man living on his own wouldn’t necessarily need a 5 bedroom house. Similarly, would a ‘successful’ person, earning a 6-figure salary, that views your property in an expensive car want to rent a tired studio flat, with no parking in a less desirable location. Consider every circumstance – does it add up?
You should also monitor the demeanour of the applicant. Excessive impatience at the length of time the checks are taking, and/or a lack of responsiveness to the requests for information could be a flag that something is not right. As well as anyone changing contact information or referees at the last minute.
Tip 3: Consider email addresses and contact information for referees
You should be getting an employer reference for your applicant. Only accept a company email address not a personal one. If you are talking to the referee, think about the right questions to ask to get as much information as you can.
Tip 4: Request to see bank statements (we would suggest 3-6 months’ worth).
Read the statements properly and take it in. Review the tenant’s income and their outgoings. Is their income in line with their payslip? Do they excessively go into their overdraft every month or have excessive outgoings that may mean they will struggle to pay rent moving forward? Read and check the statements for anything unusual.
Tip 5: Use a Letting Agent or professional referencing agency to carry out the checks.
Whilst this will cost money a Letting Agent or Professional referencing agency will have a keen eye and will be familiar with any red flags that may cause concern. They should also be carrying out formal ID checks which will validate the authenticity of the documents as well as a formal credit check. This will look into the applicant’s credit score, which again serves as another authentication that the applicants are who they say they are.
Hopefully this information has helped, however should you have any queries with reference to the above or tenancy related matters please don’t hesitate to contact me at the office.
Gemma Scott-Davies,
Lettings Manager
01474 321957
Gemmascott@mandmprop.co.uk