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Online rental fraud at an all-time high – how to avoid becoming a victim

Robin Bowman

Robin Bowman
Sep 15, 2016


Rental fraud is on the rise, fuelled by a vibrant rental market and and lots of low cost, or free-to-list platforms for advertising property, such as classified ad sites. 

Research conducted by YouGov in 2013 estimated that over 1 million people had fallen victim to rental fraud, with at least another 315,000 new victims each year.

This shows just how widespread the problem has become.

Reported incidents of rental fraud increased by 44% between 2014 to 2015, rising from 2216 reported incidents in the year ending March 2014, to 3193 in the year ending March 2015. 

It is highly likely that these figures are a huge underestimate of the real scale of the problem, as the Local Government Association claims only 5% of fraud incidents are actually reported, due to embarrassment on the part of the victim.

Classified ad sites have become breeding grounds for scammers who can post fake or misleading adverts at little to no cost and with few security measures or verification checks to pass. 

In fact, it is estimated that bogus landlords are making £775 million per year through rental scams, with an average cost per victim of roughly £2,400.

Property classifieds site TheHouseShop.com have now implemented a unique ownership verification process, using Land Registry databases – the first of its kind in Europe, and which sets a new standard for security for property classified advertising.

Verifying the authenticity of advertisers can be extremely difficult, as Nick Marr of TheHouseShop.com, explains: “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.”

By working with the with Land Registry to implement a unique new verification process, the company believes it holds the key to preventing this type of 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 utilise 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.”

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