An in-depth analysis of over 600,000 tenancy applications has revealed a concerning trend: fraudulent attempts surged by a staggering 140% over the past year.
This thorough examination, conducted by PropTech leader Goodlord, pinpointed payslip fraud as the most prevalent method tenants employed to deceive referencing systems.
To conduct the analysis, Goodlord compared a sample size of more than 300,000 tenancy applications from 2022 with an equal number from 2023. The data unveiled a significant uptick in fraud detection, with just over 1 case per 1,000 applications identified in 2022, skyrocketing to 2.9 cases per 1,000 in 2023—a notable 140% increase year-on-year.
Payslip manipulation emerged as the primary form of fraud, with tenants either inflating their income or falsifying its source, often by altering company names. The methods employed ranged from basic editing techniques to the utilization of sophisticated photoshopping tools.
Beyond payslip fraud, various other fraudulent practices came to light over the past year, including the submission of false passport images, tampering with bank statements, providing fake references, and falsely claiming employment with non-existent companies. In 2023 alone, payslip fraud constituted 58% of all detected cases, potentially resulting in substantial financial losses.
Despite the majority of applications being legitimate, the surge in fraudulent activities underscores the critical importance of implementing robust safeguards to combat manipulation within the rental market. Nimesh Parekh, Head of Referencing at Goodlord, emphasized the diverse nature of fraud, ranging from tenants embellishing their financial status to more sinister activities involving falsified IDs and forged documents.
As housing market pressures intensify, desperate tenants may resort to dishonest tactics in a bid to secure accommodation. However, Parekh cautioned against such actions, highlighting the serious repercussions, including placement on the National Fraud Database and adverse effects on future job prospects and financial endeavours.
In response to the evolving landscape of fraud, we would always recommend using a good referencing provider to reduce the risk of this issue. Alternatively, speak to us and we can help you with your tenant-finding needs, book a free no obligation call below.