Rental fraud is on the rise, fuelled by a highly competitive rental market and low cost, or free-to-list platforms for advertising property.
Research conducted by YouGov in 2013 estimated that over 1 million people had fallen victim to rental fraud, with at least a further 315,000 new victims each year, showing just how widespread the problem has become.
Reported incidents increased by 44 per cent from 2014 to 2015, from 2216 reported incidents in the year ending March 2014, to 3193 in the year ending March 2015.
However, it is likely that these figures underestimate the real scale of the problem – the Local Government Association claims that only 5 per cent of fraud incidents are reported.
Classified advertising sites have become breeding grounds for scammers to post fake or misleading adverts at little cost and with few security measures. It is estimated that bogus landlords are making £775 million per year through rental scams, with an average cost per victim of roughly £2400.
Now, the property classifieds site TheHouseShop.com has implemented a unique ownership verification process, using Land Registry databases, which, they say, combined with their numerous other security and safety checks, sets a new standard for security in the classified advertising space.
Co-founder of TheHouseShop.com, Nick Marr, says, “The difficulty with the online classified business is finding the perfect balance between empowering genuine customers, without making them jump through too many hoops, ensuring you have sufficient security checks to guarantee that users, and their ads, are genuine.”
“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.
“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 because they don’t want to admit that fraud is happening on their website.
“Thankfully, because we deal exclusively in property, we can take advantage of official records and databases to help verify the authenticity of adverts and create a safer place to find property.”
TheHouseShop.com has been working with Land Registry to implement a unique new verification process to prevent this fraud. A spokesperson for Land Registry said, “For more than 150 years Land Registry has protected and guaranteed people’s land and property rights by keeping and maintaining the Land Register for England and Wales. Today that register covers around 83 per cent of the land mass of England and Wales, contains more than 24 million titles, and is one of the largest transactional property databases in Europe.”
“The House Shop Group began development, integration and testing of the Land Registry Business Gateway system in April/May 2016, enabling them to use the Online Owner Verification service, which allows customers to verify property ownership information in under a second.”
“Encouraging the use of our services like this with TheHouseShop and similar organisations results in positive benefits for consumers, and this is particularly important where fraud and security are concerned.”
TheHouseShop.com believes that this innovative verification check is the best method available to deter scammers and bogus landlords, when combined with other security measures, “I think for a lot of people, safety concerns and fear of falling victim to a scam are real barriers when it comes to using classified ad sites, and we hope that we can now start to reverse the negative image associated with the sector.”
“We have spent a lot of time researching property-related scams and trying to better understand how we can stay one step ahead of the scammers and help our users do the same. We believe that our use of Land Registry’s verification service is the best method available to achieve this and it is something that we are really proud of.”
Rental fraud is damaging for tenants, landlords and letting agents, action needed!