Fraud by landlords is costing renters £755 million a year with one in ten tenants claiming to have been conned by the owner of their rented home, according to a survey.
Rental fraud – where tenants are duped into paying an upfront fee to rent a property which turns out to be non-existent, is already rented out or let to multiple victims at the same time – is a growing problem as the number of desperate renters rises, according to online directory 192.com.
The National Fraud Authority has reported that victims lose an average £2.394 in cases of rental fraud. 192.com said that one in five tenants do not trust their landlord when handing over cash and, when asked who they would background check if they could, a quarter said they would check up on the person renting them a property.
An increasing number of Britons rent rather than own their own home. Results of the ten-year census of England and Wales, published by the Office for National Statistics last year, revealed home-ownership has decreased from 68 per cent of households in 2001 to 64 per cent last year.
The private rental sector, rather than social housing, has absorbed much of this shift. Between 2001 and 2011 there was a rise in the share of households renting from a private landlord or letting agency – from nine per cent in 2001 to 15 per cent in 2011. Some 3.6million households now live this way.
This means a greater supply of tenants and competition is fierce – especially in major cities such as Birmingham, London and Manchester.
Yougov research estimates that nearly a million people have been the victim of a rental scam and the total is growing by 315,000 victims per year.
Rental change: 8.3million people now live in rental property, according to the latest Census
‘I was victim of rental fraud after moving with friends’
One such unfortunate victim was Kings College student Valentin Carrillo. He lost hundreds of pounds to a bogus landlord who extorted over £6,000 in deposits for properties he didn’t own.
The fraudster – operating under a fake name – duped lodgers who thought he owned Canary Wharf apartments, with bogus keys or housed tenants in properties they would later be evicted from by the real owners.
Fraudster Fazool Gajraj was later apprehended by Mr Carrillo, who is from Marseille, and has recently been jailed for two years in Snaresbrook Crown Court.
Mr Carrillo said: ‘It’s easy to get drawn into a scam when you’re desperate for somewhere to live and who really knows who their landlord actually is?
‘Next time I would take even more care to background check someone I’m renting from.’
To combat the scams, the online directory has launched a service offering background reports on UK residents, which it says offers protection against deception and fraud.
These background reports – which cost £30 – draw on residential history, negative financial indicators, property ownership, company director information to create an in-depth profile of an individual. Insolvency records and county court judgements in the background reports will reveal unpaid debts, and mortality data will help expose identities stolen from the deceased.
Address information in the background reports will show where someone lives, has lived previously, and who with.The residential listings also display neighbour’s contact details, and demographic profiles of neighbourhoods.
Dominic Blackburn, product director of 192.com, said: ‘Background reports offer protection from falsehoods and fraud. They will counter the lies told in when buying a home, renting accommodation, or when transacting with an unknown party.
Avoid becoming a victim of rental fraud:
Richard Lambert chief of the National Landlords Association has the following advice for tenants:
- Tenants should always visit the property with the landlord or letting agent before handing over a deposit.
- Where possible, tenants should pay a deposit using a credit card or via a direct debit to gain some protection from the banks – never hand over cash.
- Tenants should look for professional landlords who are members of a professional body such as the NLA.
- If using a letting agent, tenants should look for tenants who are members of a trade body such as The UK Association of Letting Agents or the Association of Residential Letting Agents.
- UKALA members are required to have Client Money Protection in place which means that all monies given to the agent are insured.
- If the tenant is not sure about a letting agent, they should call trading standards before entering into any contracts.
Source: Mail Online