Rental scams are on the rise and tenants and private landlords are potentially more at risk of being scammed. But there are some useful tips “Red flags” to watch out for. As agents it’s our business to be aware and carefully do our due diligence in the application process to alleviate falling prey to scammers. It is usually easy to spot a scam however scammers are savvy and sometimes all is not as it seems.
The latest which agents and owners alike are facing are fraudulent bank statements submitted with the application, seemingly stamped and dated by the banks. Most wouldn’t question the validity when presented with bank statements looking legit.
For tenants it is fundamental that you physically view the property and meet with the agent, or if viewing without the agent that you verify who the agent is, i.e. scammers often take pictures off ads currently being advertised by agents and sometimes even use the agent’s name. Always verify the authenticity of the agent by phoning the agency (not merely a cellphone provided in the ad). It is imperative that no funds should change hands at this stage. Red flag… if asked to pay a deposit to secure the property and/or first months rental before the application has been processed and lease drawn up. It can be easy to get excited by a ‘good deal’ and think by paying the deposit you are guaranteed a lease.
It is important to remember that these con artists are professional and you can easily be swept up by their sweet talking. Never accept that you cannot physically view a property. Red flag ……. Why an appointment can’t be kept, “agent/landlord” is out of town and cannot be there, or keys not available or being couriered. But they stress the urgency as there are a number of applications and prospective tenants who are willing to pay the deposit.
For a genuine rental application, you would need to provide ID, bank statements, proof of income, employment history, references past and present. FICA , proof of current residence. If not asked to provide this with a signed application form giving the agent/landlord permission to carry out check then Red flag…..start asking why. And never submit this documentation to anyone until you’ve verified that the agent.
Insist on seeing the current FFC and check the EAAB website for registration. Or do your own investigations as every estate agent has to be registered with the Estate Agency Affairs Board (EAAB) and have an up-to-date Fidelity Fund certificate. (FFC). These certificates are issued on an annual basis and must reflect that the agent is licensed to practise for the current year. Regardless of any excuse given, it's illegal for an agent to practise if they are not in possession of a valid FFC.
As the financial strain on tenants is increasing, the demand for more affordable rentals rises thus making it easier for con artists to operate by “providing” a good deal and using fear of loss as a tool con tenants into paying a deposit upfront to secure “due to the number of people interested”.
• Don't pay any form of deposit or application fee until you have physically viewed the inside and outside of a property and met with/verified the agent.
• Check and see if the agency marketing the rental property has a valid Fidelity Fund certificate.
• DO NOT pay any money before or during an application process until the go ahead has been given and application and ITC checks have been concluded.
• Be wary of adverts on free classified websites.
• If an add looks too good to be true and the price is a giveaway compared to what is advertised in the area - then it probably is too good to be true.
• Never do business purely via sms / email. When meeting with a private landlord ask for proof of ownership to verify that they are in fact are the registered owners.
• An agent will need to have a signed Mandate with the owner and would have received FICA and ID as well as proof of ownership.
• Always insist on a written lease and check it carefully before signing.
• Private Landlords – carefully scrutinise bank statements submitted with an application for any sign of alteration to e.g. the name, or date.
The information contained in this article expresses our thoughts, views and understanding based on our experience and is not to be taken as legal advice. As such LettingWorx Rentals will not be liable for any errors or omissions in this information.