Strong demand for rental properties, particularly in the Capital, is bringing a surge in online fraud, where fake landlords trick would-be tenants into transferring deposits for properties that don’t exist.
Police forces in the UK report a 44 per cent increase in the scam last year, claiming that around 3,000 people seeking accommodation contacted them.
But other organisations refute this figure saying it is just the tip of the iceberg, as most victims do not report their loss out of embarrassment
The Local Government Association (LGA) suggests this represents just 5 per cent of victims and YouGov think there were more than one million victims of rental fraud in 2013.
As reported by the Daily Telegraph, the Property advertising website “The House Shop” has estimated that fake landlords are making £775m a year from victims who, on average, lose £2,400 through each scam.
Gumtree is a favourite website for the criminals where they can easily place ads for free on the popular platform. Often properties are listed with impressive photos copied from other websites, but whereas the photos are genuine, the properties they advertise are not.
The victims, and foreign students searching from abroad are a prime target, are instructed to transfer an upfront deposit to “secure the property” before they can be invited to a viewing. When they arrive to take up their accommodation of course, it does not exist, their money has gone, and all contact details with the “landlord” have vanished.
Property website Rightmove says that these rental scams can often be very sophisticated, involving seemingly authentic documents copied from familiar firms. One scam involved the tenants being sent a personalised tenant verification request and instructed to pay one month’s rent and a security deposit of £1,200 to Rightmove PLC.
The tenant was told that Rightmove would hold the money (which was in fact paid into an Italian bank) until the contract was signed, or it would be refunded in full if the tenant changed its mind.
The House Shop Co-founder Nick Marr told the Daily Telegraph:
“Scammers have become highly sophisticated and it isn’t always easy to spot fake or misleading ads – even manually reviewing adverts can still allow some bogus ads to slip through the net.
“To be honest, I think it’s a bit of a dirty little secret in the industry, because we all know that this is going on, but no one wants to step up and talk about it openly because they don’t want to admit that fraud is happening on their website.
“And for many players in the classified ad space, there is quite frankly very little they can do to prevent it.”
A Rightmove spokesman said:
“We are aware of a fraudulent ‘Rightmove tenant verification’ that a few home-hunters have come across when looking for property in other ways on the internet.
“Rightmove does not offer any form of verification process, nor do we request or accept money directly from tenants.
“We take this subject extremely seriously and have a team that helps home-hunters with any queries of this nature, and we always advise people to use estate and letting agents.”
Action Fraud, have published their advice on how to avoid being taken in by this:
1. Don’t send money upfront before viewing the property. Deposits are standard once you’ve signed a contract (and should be paid into a deposit protection scheme) but transferring funds to secure a room is not
2. Look out for listings that use the same photographs and those that have none. Check for a UK phone number and beware those that start 070 as this is a non-geographic number. Some of the adverts might be too good to be true – others will stand out because they simply appear better than comparable properties on the market
3. Visit the property you intend to rent. Ask the landlord to verify ID and for any safety certificates such as gas and electricity
4. Be suspicious of landlords who ask for the money to be wired using a service such as Western Union – this should only be done for someone you know and trust.
Google Chrome users can check for other instances of photo images online; a genuine photo appears only once – simply right click on the image and click “Search Google for Image”
A Statement from Gumtree:
“We take fraud very seriously, and work closely with Action Fraud and other organisations to tackle scams and educate our users on how to avoid them. In addition to our usual advertising regulations, we have property rules to help protect tenants; for example, landlords must carry out ‘right to rent’ checks and hold an Energy Performance Certificate (EPC) before posting property ads. Our dedicated advice page for Gumtree users on how to spot a scam can be found on our website and we encourage anyone that thinks they may have come across a scam to report it to us immediately. Our dedicated safety team can investigate and take action such as blocking the offender from the site and aid the police in their investigation. The full list of rules can be found on our website.”
Tenants Hit by Rise in Online Rental Fraud https://t.co/Ho9E9k4orM
— LandlordZONE (@LandlordZONE) September 27, 2016