Tenant Fraud: Types, Warning Signs and Prevention for Landlords
Tenant fraud is becoming a growing concern for landlords, from false documents and misleading references to rent-to-rent schemes and undisclosed occupants. In this blog, we look at the most common risks, practical ways to prevent them, the credibility behind current research, and how Cope & Co helps landlords reduce risk and protect rental income.
Finding the right tenant has always been one of the most important parts of letting a property. However, as fraudulent documents become easier to produce and organised scams become more sophisticated, landlords need to look beyond a convincing application.
Research conducted by LegalforLandlords found that 77% of 1,000 UK landlords believe tenant fraud has become more common during the past three years. One in ten respondents said they had experienced it personally.
Among landlords who had encountered fraud, the most commonly reported incident involved a tenant deliberately failing to pay rent after providing misleading information during the application process. Other cases included properties being used for criminal activity, unauthorised subletting, false employment or income information and undisclosed occupants. Almost half of affected landlords said their most serious incident had cost them at least £2,500.
That does not mean landlords should view every applicant with suspicion. The overwhelming majority of tenants are genuine, and someone experiencing financial hardship is not automatically committing fraud. The answer is not profiling people or making assumptions. It is having a consistent, evidence-based process that verifies the information provided before keys are released.
How credible is the research?
The research was commissioned by LegalforLandlords, an established operator with significant experience of the practical risks encountered in the private rented sector.
It is still important to put the findings into context. This is an industry survey commissioned by a commercial landlord-services provider, rather than police-recorded crime data or an official government measure of tenancy fraud.
I would suggest that the percentages should therefore be treated as a strong indication of landlord experiences and concerns, rather than a precise measurement of fraud across every rental property in Britain. Nevertheless, the types of incidents reported are credible and closely reflect the problems professional letting agents, referencing providers and landlords regularly need to guard against.
What is tenancy fraud?
Tenancy fraud generally involves someone deliberately providing false or misleading information to obtain a property, conceal how it will be occupied or avoid their obligations after moving in.
It can begin during the application process, but it may also develop during the tenancy. These are some of the most common forms:
⚠️ Identity and document fraud
An applicant may use false, altered or stolen identity documents. In more sophisticated cases, they may use the identity of a genuine person with a stronger credit history.
Warning signs can include:
🔹 Different names or address formats across documents
🔹 Photographs that do not clearly match the applicant
🔹 Gaps or inconsistencies in address history
🔹 Documents with unusual formatting or missing information
🔹 An applicant who is reluctant to complete identity checks
A document that looks professional should not automatically be accepted as genuine. Modern editing software can make altered statements, payslips and identification appear convincing at first glance.
⚠️ False income or employment information
Affordability fraud occurs when an applicant exaggerates or fabricates their earnings to meet a landlord’s income criteria.
This could involve edited payslips, invented employment, false job titles, altered bank statements or an accomplice pretending to be an employer. An applicant may genuinely intend to pay the rent, but false affordability information can still leave both tenant and landlord in an unsustainable position.
Income information should therefore be checked against several sources rather than relying on one uploaded document.
⚠️ False employer or landlord references
A reference is only useful when the person providing it is genuine.
An applicant could give the telephone number of a friend who pretends to be a previous landlord or employer. References may also be supplied through newly created email addresses that appear professional but have no genuine connection to the named organisation.
Contact details should be independently verified wherever possible. Calling only the telephone number written on the application does not establish that the referee is who they claim to be.
⚠️ Deliberate rent-default fraud
Not every missed payment is fraudulent. Tenants can lose their jobs, become ill or experience an unexpected change in circumstances.
Fraud is more likely where misleading information was used to obtain the tenancy or where there is evidence that the applicant never intended to meet the rental commitment. In the LegalforLandlords survey, deliberate non-payment following misleading application information was the most commonly reported form of tenant fraud.
This distinction obviously matters. Genuine financial difficulty should be approached through early communication and appropriate support, while suspected deliberate deception may require a different legal and risk-management response.
⚠️ Undisclosed occupants
An applicant may move additional adults into the property without telling the landlord or agent. These could be partners, relatives, paying lodgers or unrelated sharers.
Undisclosed occupation can create problems with:
🔹 Right to Rent responsibilities
🔹 Overcrowding
🔹 HMO or local licensing requirements
🔹 Buildings and landlord insurance
🔹 Mortgage conditions
🔹 Property wear and maintenance
🔹 Responsibility for rent and damage
Government guidance requires Right to Rent checks to be completed for all prospective adult occupiers in England. Checks must be applied consistently, rather than only to people assumed to be from outside the UK.
⚠️ Unauthorised subletting and rent-to-rent
In an unauthorised rent-to-rent arrangement, a tenant takes a property and then rents the whole property or individual rooms to other people without the landlord’s knowledge or permission.
The named tenant may collect substantially more rent than they pay to the landlord. Meanwhile, the property owner may have no idea who is living in the home, how many occupants are present or whether additional licensing is required.
The landlord can also remain exposed to mortgage, lease, insurance and safety issues, despite having lost day-to-day control of the property. 10% of affected landlords in the research identified unauthorised subletting or rent-to-rent as their most significant incident.
⚠️ Using the property for criminal purposes
A particularly serious form of tenancy fraud involves obtaining a property under false pretences and then using it for illegal activity.
This can result in substantial damage, safety hazards, complaints from neighbours and complicated possession proceedings. In the survey, 19% of landlords who had experienced tenant fraud said they had unknowingly allowed their property to be used for criminal activity.
How landlords can reduce the risk of tenancy fraud
No referencing process can remove every risk. However, a structured approach makes deception harder, identifies inconsistencies earlier and creates a clear record of the checks completed.
✅ Complete every check before occupation
Pressure to avoid a void period can tempt landlords to shorten the application process or allow someone to move in while references are still outstanding.
That is a false economy. Once an applicant occupies the property, resolving a fraudulent tenancy can become substantially more expensive and time-consuming.
Referencing should be completed and reviewed before the tenancy begins and before keys are released.
✅ Verify identity and Right to Rent properly
Identity checks should confirm that the applicant is a real person and that the person completing the application matches the documents supplied.
Landlords and agents in England must also check the Right to Rent of every prospective adult occupier. Depending on the applicant, this may involve an online Home Office check, an approved digital identity process or an examination of acceptable original documents.
Copies and records should be kept in accordance with the relevant guidance. The same process must be applied fairly to every applicant, without discrimination.
✅ Check affordability using reliable evidence
A robust affordability assessment normally considers income, employment, existing commitments and the consistency of the applicant’s financial information.
Where appropriate and with the applicant’s permission, open-banking or account-verification technology can provide stronger evidence than a standalone PDF bank statement. Salary payments can then be compared with payslips and the information supplied by the employer.
Self-employed applicants may require different evidence, such as tax calculations, accounts or confirmation from an accountant. A different form of income does not automatically indicate a greater risk; the important point is whether it can be verified.
✅ Independently validate references
Employer and previous-landlord details should be checked through an independent source.
For example, an employer’s main telephone number or official website can be used rather than relying entirely on the contact information supplied by the applicant. The same principle applies to email domains and previous landlord details.
An evasive or difficult-to-verify referee does not prove fraud, but it should prompt additional questions before a decision is made.
✅ Cross-check the complete application
Fraud is often detected through inconsistencies rather than one obviously false document. Names, addresses, employment dates, salary figures, bank credits and previous tenancy dates should tell a consistent story. Minor differences may have an innocent explanation, but unexplained contradictions should not be ignored.
Applicants should be given a reasonable opportunity to clarify discrepancies. Decisions should then be based on documented evidence rather than assumptions or instinct alone.
✅ Record every authorised occupier
The application and tenancy documentation should identify all adults who will be living at the property. The terms covering lodgers, subletting, business use and changes of occupancy should also be clear. Tenants should know that they must contact the landlord or managing agent before allowing someone else to move in permanently.
Clear terms will not prevent deliberate fraud by themselves, but they reduce ambiguity and make later action easier to support.
✅ Carry out a professional check-in
A detailed inventory and schedule of condition should record the property, its contents, cleanliness, keys, meter readings and any existing damage at the start of the tenancy. The check-in also provides an opportunity to confirm who is taking possession and ensure the people receiving the keys are the applicants who completed the referencing process.
✅ Arrange periodic inspections
Properly arranged inspections can identify unexpected occupancy, unusual alterations, maintenance issues or signs that the property is not being used as agreed. Inspections should never become intrusive or be conducted without the required notice. Tenants are entitled to quiet enjoyment of their home, so visits should be reasonable, properly communicated and undertaken in accordance with the tenancy and legal access requirements.
At Cope & Co., we recommend that inspection frequency reflects the individual property and tenancy, with attention given to condition, occupancy, repairs, ventilation and safety.
✅ Monitor rent and respond to problems early
A missed payment does not necessarily indicate fraud, but it should not be allowed to drift without communication. Early contact can distinguish a genuine temporary problem from deliberate avoidance. Accurate rent statements, written communication and clear notes are valuable if formal action later becomes necessary.
✅ Consider appropriate insurance and legal protection
Rent guarantee and legal-expenses cover can provide an additional layer of protection, but it is not a replacement for referencing. Policies normally have terms, exclusions and eligibility requirements. A landlord may need to demonstrate that prescribed referencing checks were completed before cover will respond. The policy documentation should therefore be reviewed carefully rather than assuming every arrears or fraud-related loss will be covered.
How Cope & Co protects landlords
At Cope & Co., we do much more than advertise a property and hand over the keys!
Our involvement begins with a realistic rental valuation and professional marketing. We manage enquiries, conduct viewings and take applicants through a structured selection and referencing process. Referencing would normally consider identity, income, employment, credit history, previous-landlord information and Right to Rent status.
Once a suitable tenant has been selected, we manage the tenancy documentation, deposit arrangements and compliance process. For fully managed properties, we can also handle rent collection, inspections, maintenance reporting, contractor coordination and day-to-day communication with the tenant.
Our team brings more than 25 years of property experience and detailed knowledge of Derby and the surrounding rental market. That local understanding helps us assess applications in context while still applying a fair and consistent process.
For landlords looking for more complete protection, our LetSimple service combines professional marketing, thorough tenant referencing, ongoing management, inspections, repairs and compliance support within a transparent monthly subscription. It also includes rent guarantee insurance cover, subject to the applicable policy terms.
No agent can promise that tenant fraud will never occur. What we can do is put strong preventative measures in place, identify warning signs as early as possible and maintain the records and management processes needed to protect your position.
Prevention is more effective than recovery
The most important lesson here is that tenancy fraud often becomes apparent only after the tenant has moved in. By that point, the landlord may already be facing arrears, legal costs, property damage or unknown occupants.
A professional application process can feel thorough, but that is exactly the point. Good referencing protects landlords, their properties and the many genuine tenants who provide accurate information and meet their responsibilities.
Landlords who are concerned about their current referencing arrangements, an applicant or the management of an existing tenancy can speak to Cope & Co for practical, locally informed advice.
Book a lettings consultation with me and let us help you protect your property, your income and your peace of mind.
This article provides general information and should not be treated as legal or insurance advice. Individual circumstances, legal requirements and policy terms may differ.
