Residential Evil. Why letting agents need smart KYC to avoid trouble with tenants.
November 29, 2019
Property rental fraud is booming. Use of fake ID documents has surged after tenant referencing fees were banned. Traditional checks and references are too easy to get around. But there are cunning ways to avoid treacherous tenants.
In this blog I talk about why property management companies, letting agents, and local authorities need smart KYC checks, and how we can help….
The number of tenants using fraudulent information to secure a rental property has soared in the past year, and we’re here to help.
Property fraud has tripled in England and Wales in the last five years to a value of over £25m (according to the Land Registry).
Use of fake ID documents has surged since fees for tenant referencing have been banned, resulting in more fraudulent attempts to rent houses (illegally, to sub-let, or even to then attempt to sell the property).
Social tenancy fraud is on the rise, in England alone the local authorities own 1.59 million homes, and fraud within the sector is also booming.
Landlord Action states that where traditional referencing falls short, innovation is required to spot fraud.
The new need for KYC
A recent article in The Negotiator says there has been a recent increase in criminals hoping to rent and use property for illicit purposes.
After fees have been banned for tenant referencing it’s claimed that criminals can submit multiple applications for different properties in the knowledge it won’t cost them a penny, and that the landlord will foot the bill for referencing.
“Extremely good” fake passports and bank statements have been used that people manually checking such documents without expertise would miss.
The rental market is straining under the current requirements of ‘Generation Rent’ and the number of ID documents that need to be checked has risen.
Staff being given specialist training to recognise fraudulent documents helps, but the only way to be sure is to use software that can read any national ID and authenticate it, in order for letting agents to be sure.
Indeed, it’s stated by a leading London agency that “Unfortunately, the majority of referencing companies do not even collect ID and proof of address and conduct referencing as a sideline”.
Therefore it’s clear that cost-effective automated software from identity verification specialists is the key.
Avoid house hijacking!
Those who use fraudulent details or fake ID may sublet the property illegally or illicitly, and they may not pay any rent at all, and indeed incur damage costs at the same time, but it can be even worse…
The Financial Times along with many other articles and news reports in recent years have highlighted the audacious scam of fake tenants who adopt a property owner’s identity and then sell the property!
Property hijacking is a growth-industry for criminals. As such a high-value asset it’s an attractive target for ambitious fraudsters. And home hijacking has been fuelled by a broader growth in identity theft which Cifas figures show.
How Acuant can help
We enable letting agents to avoid risks with new tenants, and we can reduce fraud in the rental market.
Accurate checks are essential, in the private and public sector. KYC (rather than simply using references) is essential to reduce fraud within the rental sector and social housing.
We offer KYC (Know Your Customer) to national companies and organisations that manage property and accommodation rental, as well as the public sector and local authorities, in order for them to verify the identity of their tenants.
Tenants who give false information can incur huge costs and losses for the private and public sector. Our easy-to-use and tenant-friendly solutions are able to put a stop to this kind of fraud.
Tenants can verify themselves online in seconds, using these automated, global, best-in-class and customer-friendly solutions.
Why it works
We’ve created social authentication which is used in 177 countries worldwide. It’s perfect for tenants, as the vast majority have Facebook accounts, and so can verify themselves in seconds using this source. This is far preferable to expensive credit register checks which many tenants (young, or low income, or from outside the UK) may not feature on.
iDocufy can recognise and read any government-issued ID in the world, and means you can be sure about the ID that is presented, and also means you have a strong audit trail. Our software is the same that border guards use to check and authenticate those going through immigration, so you know it’s the best.
The dual check of social authentication and ID verification eliminates the chance of fake identity and fake IDs being used.
Tenants, as customers, want the process to be as quick and easy as possible, and we offer speed and convenience for the tennant like no other, whilst ensuring the security you need.