Fraud within the UK is under no circumstances a brand new drawback, however previously few years, the size and complexity of fraudulent actions has elevated to worrying ranges. In accordance with the most recent Crime Survey for England and Wales, there was
a 54% rise in fraud and pc misuse offences, between December 2019 and December 2021.
One a lot missed, however quickly growing, type of fraud is tenancy fraud. Given the continuing rental disaster, created by a scarcity of accessible properties and skyrocketing rental costs, tenancy fraud is turning into extra worthwhile, with individuals utilizing extra subtle
strategies to illegally acquire entry to properties.
The most typical methods during which tenancy fraud is carried out includes offering false or doctored identification or documentation (proper to hire, earnings statements, landlord references, employment references, and so on). Whereas brokers and landlords have lengthy been
conscious of the danger of fraud, new applied sciences are making it considerably tougher to detect.
The numerous developments in know-how used to battle towards fraudsters and their makes an attempt to commit monetary crime are being embraced by many industries — not least in lettings. AI instruments reminiscent of open banking are making an actual distinction within the referencing
course of utilized by letting brokers, boosting their capacity to flag and refute fraudulent tenancy functions.
So, how does open banking work precisely?
At one level, individuals had been frightened about how safe cell banking was, however now practically everybody makes use of it as it’s faster, simpler and safe. Open banking may be very comparable, with many now realising not solely how straightforward it’s to examine statements through open banking,
however furthermore, how useful the added safety measure is.
Whereas brokers have beforehand thought that one of the simplest ways to examine somebody’s earnings is to examine their payslip, these will be simply defrauded as there are even quite a few firms which you could go to that present fraudulent payslips.
The monetary know-how securely opens up banking knowledge, reminiscent of transactions, bank cards and loans to authorised third events. These third events are then required to undergo an in depth due diligence course of to get regulatory permission from the
Monetary Conduct Authority.
Then, with the permission of the checking account holder, these third events may also help shoppers to make better-informed choices round their funds and to handle their cash simpler.
In easy phrases, open banking helps individuals to maneuver, handle and make extra of their cash.
And by presenting a clear image of a tenant’s earnings, open banking not solely paves the best way for a far less complicated and faster referencing course of, it additionally provides a layer of safety towards fraud. Whereas brokers have beforehand thought that one of the simplest ways
to examine somebody’s earnings is to examine their payslip, these will be simply defrauded as there are even quite a few firms which you could go to that present fraudulent payslips. Open banking signifies that lettings brokers can confirm your earnings primarily based on the pay that
really goes in to your checking account.
A crucial preventative for fraud
Open banking supplies letting brokers with a snapshot of their tenant’s monetary behaviour primarily based on their earnings and rental cost historical past immediately from their financial institution – in fact, with the tenant’s permission. It’s an immediate course of that may assist pace up
the referencing course of dramatically and ensures that data can’t be falsified.
That is massively useful in offering brokers and tenants alike with peace of thoughts in terms of verifying tenants and validating their earnings and expenditure. Anti-fraud tech like open banking additionally has the capability to avoid wasting landlords large quantities of cash;
evaluation from Goodlord revealed that particular person landlords would have misplaced a mixed £1 million during the last 12 months with out anti-fraud know-how in place to forestall suspicious paperwork and fraudulent data from being submitted. The truth is, these utilizing
open banking had been ready to make sure that not a single fraudster was in a position to get by way of, which actually exemplifies the significance of the tech.
Whereas the referencing trade has remained archaic in its strategy for a while, the rise of open banking has nice potential to scale back fraudulent exercise. At present, about half of Goodlord’s candidates are being verified by way of open banking, however this
is growing yearly – rapidly, we’re seeing an excellent uptick and little question, that is just the start.