Rental Application Fraud is on the rise in 2023

Data Enrichment

Rental application fraud has skyrocketed over the last few years with technology becoming more and more advanced. There are tons of reasons why people lie on their rental applications: some may wish to sublet, others may have no intention of paying rent, and others wish to secure properties outside of their means.

What all these fraudsters benefit from is a systemic lack of attention to detail in traditional referencing systems. They exploit the fact that most reference companies in the UK or Europe are subpar in their checks, relying on outdated qualification methods and hardly any technological due diligence. Fraudsters are extremely hard to spot when you're only looking with the naked eye. Luckily for a multitude of landlords out there, Homeppl are different.

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We can spot a fake lease agreement like it's going out of fashion. Identity fraudsters are using all types of new tools to create fictitious personas, using fake credit scores and financial documents... so when they eventually disappear, after living rent-free, they cannot be tracked and are able to do it all over again. But this is not the only industry impacted. Mortgages, Financial Services, Healthtech... anything with an application process is not safe!

With this, let's take a deeper dive into application fraud and the impact it can have on rentals and other verticals too.

What is application fraud?

Put simply, application fraud describes the act in which somebody would either lie about their identity when progressing through an application process or uses false information and/or false documents in order to deceive and cloak their true circumstances. Application fraud is usually committed in order to obtain access to financial products they otherwise would not be considered for. Examples include a luxury rental property, a mortgage, a job, or an investment portfolio.

More specifically, rental application fraud is when someone lies on their application to a property manager, letting agent or landlord in order to secure a certain rental property. With a huge availability of photo and document editing software, just free to use on the internet, rental application fraud is a massive issue. We should know, we catch fraud on an almost daily basis.

This is done sometimes to try and prove that someone can afford a rental property when in actuality they cannot, which can lead to huge consequences for the landlord further down the line when tenants fall into rent arrears and default. It proves detrimentally costly for landlords and agents.

In July last year, we caught someone lying on their rental application to the tune of £121,333 on a flat in Mayfair, London. In June we detected over £1.2m in rental fraud in just one month. Application fraud is serious business.

Value of Fraud Detected

2023 rental application fraud trends

Homeppl have released a 2023 trends and data reports that documented the entire year's fraud cases from 2022.

This data set includes a common fraudster profile, technology information used to combat it, 2023 trends and a summary of the previous year. You can download this 2023 tenancy fraud report here.

Gain insights into rental application fraud such as UK fraud hotspots:

UK 2022 Fraud Map

For the latest 2023 rental application fraud data reports, you can see our monthly summaries for:

How prevalent is rental application fraud?

In the age of advanced technology, application fraud is rife! Particularly within the rental industry, many are desperate to seem like the best prospective tenant in order to secure amazing rental properties, even though they might not actually be able to afford them. A study conducted by CIPFA found that 71% of fraud reported in the UK was property fraud! The UK Land Registry received over 50% more claims for fraud than they have actually prevented since 2009. 

A look at the popular Google searches this month is telling of people's affinity to fake their rental applications. Here are some popular Google searches relating to:

Fake bank statements

  • 'Bank Statement Generator'

  • '3 months of bank statements for free'

  • 'fake Halifax bank statement template free'


  • 'Fake payslips generator'

  • 'fake payslips for rental application'

  • 'fake payslip for mortgage'

Some even border on the obvious and ridiculous:

  • 'How to commit wire fraud'

  • 'How to commit bank fraud'

  • 'How to commit fraud online'

These searches have very real consequences for financial institutions, letting agents and lenders.

How is leasing application fraud committed?

Fabricating or modifying financial documents

The most common way to commit tenancy application fraud is by modifying or even fabricating financial documents to feign true financial/residential circumstances. As technology has advanced exponentially over the last decade and has become so widely accessible, almost everyone has access to intelligent software that can modify or fabricate documents that are almost impossible to detect with the human eye. Fake documents have become so common that you can even download fake bank slip templates from the internet, sometimes even for free!

When it comes to rentals, fraudsters will almost always provide modified or fabricated bank statements or fake pay slips in the tenancy reference checks to attempt to fool landlords. Once a tenancy reference check is complete and the documents go through undetected, the letting agent is presented with a viable candidate for the property with perfect affordability. Below you can see clear modifications to this bank statement Homeppl detected:

July Monthly Fraud Round up - Modified Bank Statement

Identity theft fraud

Another method is identity fraud. Is the person in your application process really who they say they are? Commonly, identity fraudsters will steal an unsuspecting victim's personal details and financial credentials to impersonate them and take on their financial/residential profile.

Identity theft does not require sophisticated techniques or huge experience, it can be as simple as guessing someone's passwords, stealing certain documents from them or gathering their data from social media platforms. With it becoming easier and easier for this to be successful, as always, it becomes increasingly common yet more difficult to detect!

One way that Homeppl counteract identity fraud is through our data enrichment technology. We match an applicant's email address or phone number to a considerable number of online data points to see if they match up.

What are the effects of tenancy application fraud in rentals?

The financial costs attached to theft by fraudulent leasing or lying on rental applications can be, and often are huge.

It is well documented that the average cost of a 'bad tenant' now to a landlord in legal proceedings and defaults sits around £40,000. The average cost of losing the custom of landlords for letting agents is much higher.

The three most common types of fraud in the rental industry is:

  1. A tenant who never had the intention of paying any rent

  2. A tenant who has inflated their income to improve affodability

  3. Illegal subletting

In the first scenario, many professional fraudsters commit identity fraud with no intention of paying any rent and attempt to live rent-free as long as possible. They'll know exactly how to elongate the eviction process. They'll know which letting agencies have the most vulnerable referencing solution and which areas to target. Homeppl are the only referencing solution on the market who commit each tenant to 150+ anti-fraud tests and catches 100% of fraud before it becomes costly.

For the second situation, the risk of eviction will probably come slightly later as it will take a few months for their modified and inflated finances to come to light. Most tenants who default will do so after 5 months on the property.

Times are tough at the moment and the percentage of defaults is exceptionally high when someone has lied about their true financial background when securing a rental property. Eviction proceedings are usually expensive, stressful and take a long time to complete.

It is far more economical to prevent fraudsters from even being selected as tenants rather than trying to evict them after. This is why advanced tenant reference checks are absolutely essential to complete.

Running Rental Checks for Letting Agents

When it comes to subletting illegally, tenant fraudsters will try to sign a tenancy agreement for a luxury apartment out of their price range, and rent it to other prospective tenants for a higher cost than the original rent price. This leaves landlords down in the deal and with no visibility over who is actually occupying their property.

Application fraud across other industries

Application fraud prevention is just as required in other financial industries and is equally as, and in certain circumstances more, aggressive than in the rental market.

Database breaches

Company databases are a common target for attackers as they hold a vast amount of personal information. Breaches can occur as a result of; employees creating insecure passwords; employees leaving passwords accessible to others; advanced and expert hacking tools. Some hackers employ millions of bots to crack passwords.

Call centre fraud

Another method is to target call centres. It's very hard to verify someone's identity over the phone, which makes them susceptible to being hit by fraudsters. Homeppl will never rely on just a phone verification for any referencing process. This is one of the major faults we've identified in the rental referencing market.

Mail Tracking

Utilising tracking services for mail and package deliveries are also a super clever method employed by fraudsters.

They will order new bank cards as the victim and track them to steal the mail at the perfect opportunity before they are seen, which means they are in possession of a working credit card.

Now with the advancements in data cloud storage, they have become subject to brutal attacks by millions of bots. These bots will enter a variety of passwords and codes in an attempt to inevitably gain access to all the information held in the bases.

In a nutshell, applicant fraud has hit the roof with the accessibility of software that is able to create or modify documents within minutes. New technology has made it so easy that virtually anyone can do this without being caught out.

The effects, we have seen first hand is detrimental to landlords and letting agents in the rental industry. Other financial industries are also badly affected.

Homeppl has recently release a self-use document analysis tool which is available of detecting all modifications to legitimate documents, proving authenticity and stopping various forms of application fraud in its wake.

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