Oct 24 - Rental fraud
Rental Fraud occurs when would-be tenants are tricked into paying an upfront fee to rent a property. In reality, the property does not exist, has already been rented or has been rented to multiple victims at the same time. The victim loses their upfront fee and cannot use the property they thought had been secured with their payment.
Summary
- The National Fraud Intelligence Bureau (NFIB) – www.nfib.police.uk - has received approximately 95 reports of rental fraud through Action Fraud with a combined reported loss of over £100,000. Individual losses range from several hundred pounds to £26,500.
- The majority of losses are relatively small for the number of reports with the crime often affecting those on a fixed budget
- Intelligence suggests that students are particularly vulnerable to rental fraud, particularly those seeking rented accommodation in the Greater London area.
- Over half of the 95 reports come from victims in the Greater London area, with other large cities in the North East and Midlands also targeted. The majority of reports do not contain a suspect location
- Initial intelligence suggests rental fraud is a seasonal crime, peaking in August. This coincides with the period when students and graduate job seekers are looking to rent properties.
Key Findings:
- Rental Fraud is not a “flash in the pan” fraud. Due to the way rented accommodation is advertised via the Internet and the high numbers of people seeking to live in London it will be a re-occurring fraud;
- Students and recent graduates are the key demographic for potential fraudsters;
- Rental fraud creates victims in the UK and overseas countries including: Sweden, Germany, Pakistan and Australia;
- Greater London is hot for rental fraud, due to a number of population factors. London has a transient population of students and those seeking work in the Capital. It also has a high concentration of academic institutions and is a centralised hub for employment;
- There are social ramifications of rental fraud, with victims sometimes being left unable to continue their education or their job;
- It is unclear where the fraudsters are operating from as in most cases a false address is given to potential tenants. It is believed that a large number of fraudsters are operating from outside the UK.
- Letting agents in the UK are unregulated.
Methodology
- Intelligence from the Action Fraud crime reports indicates the majority of the frauds are perpetrated in two ways:
- A flat or flat share is advertised on-line and the potential tenant views the property, signs a rental contract and agrees to pay a deposit (usually one month in advance and plus a few hundred pounds). In most cases this deposit is just over £1000 and funds are usually paid via Western Union or Money Gram. The funds are paid to the “letting agent” or “landlord”, after which time all communication is cut-off and the individual has no way to get his money back or validate their rental agreement.
- A potential tenant spots a flat for rent on-line, takes a virtual tour of the flat then contacts the advertised vendor and pays a deposit via Western Union or Money Gram.
Online forums
Like with the old “Classified” ads, there is very little regulation about what or who can submit adverts on-line. Due to the global nature of the Internet, an individual from Australia could place an advert for a flat to rent in London. On-line forums and websites is simply too big to regulate and it is no surprise that almost a quarter of the Action Fraud reports sent through to the NFIB relate specifically to on-line forums.
- NFIB advice
- Do not take/reserve/book a property you have not seen
- If you cannot get to view yourself have someone you know and trust view it for you
- If it is a private landlord do not be afraid to ask for references from previous tenants
- Ask if the landlord is a member of a landlord organization and check with that organization
- Never transfer funds direct to a landlord by Western Union or other such money transfer system. If you must transfer funds insist on doing it direct to a bank account. You are setting up a traceable transaction that is much less likely to be fraudulent.
- If you cannot satisfy these criteria be very careful and probably best to walk away
