Combatting Letting Fraud - keeping landlords safe

Fraud is an increasing problem for landlords and tenants alike. It is an ever-present risk, and its impact, both financial and legal, can be devastating.

For landlords, referencing fraud, fraudulent letting agents and letting a property for criminal activity are the main areas where fraud is happening today. It is also increasing, with over 5000 reported cases in 2024. 

As fraudsters get more sophisticated, so must we. So as you would expect Hello Neighbour is using modern technology to do just that. 

This guide sets out the key fraud risks facing landlords, the red flags and the practical steps that keep you safe. If you would like even more detail, The Independent landlord is definitely worth a read. 

How to protect buy to lets from property fraud • The Independent Landlord

If you’re ever unsure, get in touch with us at Hello Neighbour so we can check things over and give you the support you need.
You can reach us by phone on 020 8051 9546 or email lettings@hello-neighbour.com. 

What are the 3 main types of letting fraud?

1)    Tenant application and referencing fraud 

Potential tenants submit doctored payslips, fake bank statements, false passports/ID, fake references, or invented employers. They may want to hide a bad credit and renting history with fake documents and references.

The sophistication of these operations is increasing. High-quality fake bank statements and payslips can be bought online, or mocked up using Photoshop, and references from landlords and employers can be provided by a friend. And then we have AI that is constantly improving, which can help create these fake documents. 

2)    Letting for criminal activity

They use fake identities or “front landlords” to rent properties for criminal activities such as illegal HMOs, people trafficking or cannabis farming.

3)    Fake letting agents 

Sometimes scammers lift photos and descriptions from legitimate websites and repost them on free-to-list websites at a lower price. A professional looking website can make the fraudsters appear genuine.

Others clone the website of a legitimate letting agent, copying logos, staff photos, and property listings, using a subtly different domain name. Usually the fraudsters target prospective tenants, but landlords can be at risk if they engage a fake or criminal letting agent, hand over the keys, and then the agent does not protect the deposit or forward the rent to the landlord.

What does letting fraud actually cost? 

Reported “rental fraud” victim losses (NFIB / Home Office comms) reached £9m losses across with over 5,000 reports in one year.

Modelled or “true scale” estimates (beyond reported) are estimated to be as high as £63m a year. 

What are some fraud prevention essentials for landlords?

As with all fraud prevention, starting with a suspicious mindset is helpful. If it is too good to be true, it probably is. If people avoid questions or do things out of the ordinary there will be a reason. And finally, don’t underestimate the power of modern technology. Firstly, as the fraudsters use it to look as convincing as they can, but also it can be your friend as it can unpick carefully constructed frauds by checking many sources quickly. 

1)    Start with proper pre-qualification checks.

They are an essential part of deciding who you get to view your property. Not only as a means to avoid wasting valuable time by giving viewings to people who would never fit the letting criteria, but also as a means to start the gathering of detailed information from a prospective tenant. It is hard to sustain a lie as more information is collected.

2)    Always insist on a viewing.

We strongly recommend that Landlords always get tenants to view the property. If you can’t do it, there are plenty of letting professionals who can. But face to face with your prospective tenant is hard to beat. 

3)    Use professional referencing with Open Banking.

Do not rely on PDF bank statements as they are too easy to fake. Instead, pay for a reputable referencing service that uses Open Banking. This takes a read-only snapshot of tenant’s transactions in their bank account, which verifies income and the payment of rent. The tenant cannot manipulate the data as it comes directly from the bank. If a tenant refuses Open Banking "for privacy reasons," be cautious. While some genuine tenants have qualms about Open Banking, professional fraudsters will always refuse Open Banking.

4)    Verify documents properly.  

This is impossible to do without professional help but an effective reference has to be based on genuine documents and this is a key area where Fraud can be prevented through technology.

Professional reference providers can use sophisticated technology to analysis each document. They can look at a document’s editing history, the use of fonts, production software, metadata (creator, producer), as well as stream operations to determine a documents construction as well as whether the writer has used Ghostscript. All these can be compared with literally millions of genuine documents.

5)    Check previous  Landlord references properly.

We think that this is an essential element of a reference that helps support any credit checks. However, a reference from a current landlord is often of little value as they might say anything to get rid of a bad tenant. The previous landlord, on the other hand, is potentially a much better source of truth. However, you must verify that the referee is actually a landlord, and not just a friend.

6)    Research your applicants.

Google your short list of applicants, and search for them on social media. Their digital footprint, or lack of one, can be very telling.

7)    Trust your instincts but back it with data.

Whether or not you use agents, insist that someone meets the applicants in person before you agree to rent the property to them. It is harder to sustain a lie when looking someone in the eye. But be careful, make sure you support your intuition with broad data analysis. 

8)    Never be rushed.

Be wary of tenants who are desperate to move in immediately without viewing, or who offer six months' rent in cash (while they still can) to bypass checks.

9)    Plan an early property visit.

We recommend a minimum visit every six months, but visiting early in a tenancy can have significant benefits. Letting prospective tenants know that they will receive a visit two weeks after they move in to check if any maintenance needs doing is a powerful disincentive for fraudsters. Legitimate tenants welcome this, as it shows you are serious about keeping the property in good condition. 

How to check an agent before handing over the keys?

There are a number of different ways to check whether a letting agent is legitimate:

1)    Use internet search to check out the name of the agent and the address to see if there are any red flags. Does the website domain name match that on Google?

2)    Check company registration. A legitimate agency will clearly display its registered company details. Those details can then be verified independently through the official Companies House register. It is free and straightforward to research the company and the directors on the Companies House website. 
 
3)    Review contact details. Professional firms normally communicate via company email addresses and office-based phone lines. If an agent relies solely on a generic email account or a personal mobile number, that should prompt further checks. 

4)    Does the agent’s website look legitimate? It is very easy to create a convincingly professional website. Fraudsters frequently copy property details and photographs from genuine listings to create the appearance of a real business. In some cases, they rely on stock or unrelated interior images that don’t properly match the property being advertised. Before signing up with an agent, spot check their listings.

5)    Check redress and protection schemes. Membership of a recognised Client Money Protection (CMP) scheme is mandatory. Landlords can locate confirmation of that membership online and verify that the certification is current. You can check to see if they are registered here:

-    The Property Ombudsman or Property Redress.
-    Client Money Protection (CMP) scheme.

The agent is legally obliged to register with a CMP scheme, and show the scheme’s logo on their website. There should be a hyperlink to their CMP certificate. Click through to it to see if it has expired, and cross-check it with the scheme.

6)    Are their fees published? Agents are required by law to make their fee structure publicly available. The absence of clear pricing information should raise immediate questions.  

How can Hello Neighbour help you?

When we manage a property for a landlord, we automatically ask pre-qualification questions before a viewing is granted. Our viewing professionals are alert to fraud, and regularly briefed on what we see reported elsewhere. 
We take professional references which include document fraud prevention, open banking and comprehensive credit assessments. And our platform makes sure that any information on the prospective tenant is collected in one place for easy comparison and examination.
If you’re ever unsure, get in touch with us at Hello Neighbour so we can check things over and give you the support you need.

Final thought.

Fraud is getting smarter. But so are we. 

If you would like a second opinion on a tenant, agent or situation, get in touch. 

You can reach us by phone on 020 8051 9546 or email

lettings@hello-neighbour.com