Identity fraud — the most common referencing fraud
- Fraudsters use stolen or fabricated identities to pass referencing — the legitimate credit history, employment records, and address history attached to the stolen identity looks clean
- Detection: verify identity documents against issuing authority standards; use facial recognition or live video verification; cross-reference current address against Royal Mail records
- IDSP digital identity verification (from April 2022): certified Identity Service Providers verify passports against the Home Office DCS database — using an IDSP provides a statutory excuse if a fraudulent document is not detected
- Right-to-rent fraud: forged BRPs, fake visas, expired passports — landlords should use the Share Code online service for non-UK nationals; penalties up to £20,000 per illegal occupier for failed checks
Document fraud — payslips, bank statements, and references
- Payslip fraud: editable PDF templates allow convincing forgeries in minutes — detect by calling the employer independently (directory enquiries, not applicant-provided number) and checking formatting consistency
- Bank statement fraud: digital alteration of PDFs — detect by using open banking (data goes directly from bank to reference checker) or requesting original printed statements
- Fraudulent employer references: verify via Companies House and LinkedIn; call back on independently sourced numbers only
- Fraudulent landlord references: cross-reference 'previous landlord' against Land Registry; ask specific tenancy questions only a genuine landlord would know
Subletting fraud and criminal use
- Subletting fraud: tenant secretly lets to subtenants (or via Airbnb) in violation of the tenancy agreement — subtenants have no tenancy with the landlord; Ground 12 Section 8 applies to the original tenant
- Cannabis cultivation: tenant converts the property to a grow operation — electrical rewiring, hydroponics, ventilation holes, mould. Damage can be catastrophic and standard insurance often excludes illegal use
- Detection: periodic inspections (24 hours' written notice), monitoring Airbnb for the property address, utility consumption alerts
- Tenancy agreement must explicitly prohibit subletting, short-term letting, and illegal use to support Section 8 proceedings
Cannabis farm discovered — do not enter alone
Notify the police before entering. Cannabis farm electrical installations are frequently dangerous (bypassed meters, fire risk). Do not clear the property before your insurer has attended or authorised works — doing so may invalidate the claim.
Guarantor fraud and prevention
- Guarantor fraud: fictitious or financially inadequate guarantor provided; guarantor identity used without consent; guarantor agreement not executed as a deed (unenforceable)
- Verify guarantors: same referencing process as tenant including credit check, identity verification, and income check (30-36x annual rent)
- Execute as a deed: signed, witnessed, and delivered — specify obligations, whether it extends to renewals, and the claims procedure
- Consider guarantor insurance products (Zero Deposit, Reposit, flatfair) as an alternative — underwritten by insurer, removing fraudulent guarantor risk