Rental fraud on the rise: how to spot fake documents and identity fraud

This is something we've been wanting to write about for a while, because frankly, it's getting worse and the industry isn't talking about it enough.

Over the last eighteen months, the quality of forged documents we've encountered during the referencing process has increased dramatically. And the reason isn't hard to work out: generative AI tools have made it trivially easy to produce convincing fake payslips, bank statements, employer reference letters and even utility bills. What used to require some skill with Photoshop can now be done in minutes with free online tools.

What we're seeing

Let's be specific. In the last year, our fraud detection systems have flagged:

• Fabricated payslips - complete with correct company logos, PAYE details, and National Insurance numbers. Some even include realistic tax calculations. Unless you call the employer directly (and confirm you're speaking to the actual employer, not a mate with a pay-as-you-go phone), these can be very difficult to catch.
• Altered bank statements - real bank statements where the salary deposits have been inflated, or regular loan repayments have been removed. The formatting is perfect because they started with a genuine PDF.
• Fake employer reference letters - printed on what appears to be company letterhead, complete with HR contact details that ring through to the applicant or an accomplice.
• Synthetic identities - where a fraudster combines real and fabricated personal details to create a persona that passes basic checks but doesn't correspond to a real person.

Why it matters more now

With rents at record levels in many parts of the country, the incentive for tenants to misrepresent their financial position is higher than it's ever been. A tenant who earns £25,000 but wants a flat that requires £35,000 of income has a real motivation to doctor their payslip. Most of them aren't career criminals - they're people who are desperate for somewhere to live and have rationalised it to themselves as a victimless lie.

It's not victimless, of course. When a tenant can't actually afford the rent, the landlord ends up with arrears, and with Section 21 on the way out, recovering that property and that money is going to be a long, expensive process.

How we detect fraud

We've invested significantly in automated document analysis over the last couple of years. Our system examines uploaded documents for:

• Metadata inconsistencies (creation date, editing software, modification history)
• Font anomalies (mixed fonts within a document, fonts that don't match the supposed issuer's templates)
• Mathematical errors (tax calculations that don't add up, NI contributions that don't match the stated salary band)
• Template matching against known legitimate formats from major employers and banks

But technology alone isn't enough. Our referencing agents also make direct contact with employers and landlords using independently verified contact details - not the phone numbers provided on the application form. This is crucial. If a fraudster gives you a fake employer reference letter with a fake phone number, calling that number to "verify" the reference is pointless.

What agents can do

A few practical steps that significantly reduce your exposure:

1. Use Open Banking for income verification. We've said this before and we'll keep saying it: data pulled directly from a bank account cannot be fabricated. If a tenant is reluctant to use Open Banking but happy to provide paper statements, that in itself should raise a flag.
2. Use digital ID verification. Yoti's biometric checks are far more robust than asking someone to bring a passport into the office. A forged passport might fool a human eye; it won't fool document analysis AI combined with a liveness check.
3. Don't verify employer details using information provided by the applicant. Look up the company on Companies House, find their official website and call the main switchboard number. If the applicant says they work for "XYZ Consulting Ltd" and there's no trace of that company anywhere, that tells you something.
4. Use a professional referencing provider. This isn't a sales pitch - it's a genuine risk management point. DIY referencing using Google and phone calls simply isn't equipped to catch sophisticated fraud. Automated detection tools, verified databases and experienced agents make a real difference.

We take this seriously because the consequences of fraud getting through the referencing process fall on your landlords. If you'd like to discuss your fraud prevention approach or see a demo of our detection tools, get in touch.