diligentblog

Why tenant CCJ checks are a "fraudsters paradise"

Thu, 10 Mar 2016 15:08:00 GMT

Why tenant credit checks are a fraudster’s paradise

As a letting agent or landlord, the selection of the right tenant is of vital importance to ensure the smooth running of the tenancy and every effort at the referencing stage should be made to fully understand the applicant’s situation. Letting agents and landlords that rely solely on a credit check (with or without supporting copy documentation) are potentially making themselves an easy target for fraudsters and the less than honest applicant.

So what makes a credit check such a risk? The main areas below provide an insight into why a tenant credit check is absolutely no substitute for experienced professional full referencing.

False documents “proving” address information

Credit search results are accessed by providing the individual’s name AND the property addresses where the person has been living. If an address is searched where the person has no connection, the credit check result will be shown as being clear. Only the “open” electoral register can be searched, so those individuals who have opted out from receiving mail from marketing companies etc. will not be listed. Add to this that a large number of tenants simply do not bother to register at short term addresses and you can see why many applicants are not located on the electoral register.

Where a person is not listed, it is of vital importance to verify address information is indeed relevant to the individual. This is why it is normal practice to obtain documentation which links the person and the address.

However, for a fraudster, documentation is a simple task to provide and in any format. To see how easy it is, search “novelty bank statements” via Google. You will note there are numerous firms providing a false document service, and to the untrained eye, these documents can easily be accepted as being genuine.

Limited search information results

High Street finance is invariably based around a credit score with lenders having access to the individual’s payment performance on current and previous loans/credit cards. However, in the tenancy world this information IS NOT available; only public information such as CCJs, Bankruptcies and Individual Voluntary Arrangements (IVAs) can be accessed and any score produced is mainly based on public records. Just because a prospective tenant is shown as having what is perceived as a pass score does not mean they pay their bills!

What is their home status and income situation? Is the income situation set to change?

A credit search cannot confirm this.

Summary

In reality, what does a credit check actually bring to the table? Not a lot is the answer. Hopefully this article has provided you with an insight into the dangers and limitations of relying on tenant credit checks.

What is the solution?

There really is no substitute or shortcut to fully referencing your tenants, and at Diligent, our job is to get to the truth. With an average response time within 24 hours, our referencing is fast and efficient and with our personnel having the experience of over 1,000,000 tenancy applications, we fully understand what makes a good tenant and the methods used by the less than honest applicant.

Why should you choose Diligent referencing?

Wed, 16 Dec 2015 13:38:00 GMT

Why should you choose Diligent referencing? Have a listen to what Brian Compton - founder of Compton Reeback - has to say about us, and get in touch today for the ultimate tenant referencing service!

Client Testimonial from John at Chris Anthony Estates - Thank You

Wed, 16 Dec 2015 13:35:00 GMT

Our thanks go out to John from Chris Anthony Estates for his fantastic testimonial. Their referencing process has changed dramatically since using Diligent. Are you fed up with a slow, unresponsive and impersonal service from your current referencing company?

Listen to what John has to say and contact Diligent today!

An introduction to Diligent Services

Wed, 16 Dec 2015 13:30:00 GMT

At Diligent we only work with lettings agents, with our average turnaround on full references being within 24 hours.

There are no contractual tie-ins or monthly fees, and so our agents can use our services on an ad-hoc basis, whenever they require. Within the video is a short testimonial from Neil Shah of Simon Clarke Lettings Agents. Neil’s company have used numerous tenant referencing companies since being established over 20 years ago and believes what Diligent provides cannot be matched by any other company.

If you're interested to learn more about how we can help you then please don't hesitate to get in touch today.

Which One Won't Pay The Rent?

Fri, 27 Mar 2015 10:58:00 GMT

Actually, it's impossible to tell who won't pay the rent - appearances can be deceptive and Diligent never take an application at face value.

Diligent are the referencing experts with our experienced personnel having handled and analysed over 1,000,000 tenancy applications. Our unique experience means we are more than a provider of reports - we deliver a superior intelligence service on prospective tenants and guarantors.

With our vast experience in the tenancy world, we understand the methods used by less than honest individuals trying to to gain tenancy. Our systems have been designed to identify cases that fall into a potentially high risk category so we can take the appropriate referencing action to get to the truth.

Our grading recommendations are not as a result of a point scored computer process. Instead, letting agents benefit from experienced and reliable recommendations being applied to the actual application at hand.

Everyone benefits from the Diligent experience, with a fast and efficient service, reliable common sense gradings, whilst at the same time, minimising the the risk of a bad tenant experience.

To find out more about Diligent and our tenant referencing and protection services, just follow this link.

When Tenant Referencing becomes an Investigation

Thu, 19 Feb 2015 13:09:00 GMT

A fundamental part of a successful let is for your tenancy referencing company to present letting agents with a reliable & accurate picture of your applicants. Whilst most applicants are honest, there are a hard-core element of fraudulent individuals seeking rental property who sometimes piggy-back off their existing activities when making a tenancy application.

Recently, Diligent referenced four applicants who were looking to rent a property in Central London. The applicants stated that for the past 4 years, they had all been at the same employment and sharing the same rental property in London.

During the tenant referencing process, Diligent requested copy bank statements from the applicants. The documentation provided, highlighted the salary being received from the given employer and the rental payments being made regarding their current tenancy. However, the accounts referred to a branch in North Yorkshire.

The given employer had a website and the contact details matched the information provided on the application forms. The website domain however, was only registered in December 2014. This was not consistent with the supplied information, as the applicants had advised they had all been working at the same employer for 4 years.

Further checks made regarding the employer identified the business address as being an accommodation address, with the operation running as a virtual office.

The landlord information regarding the current rental address was also false. A Land Registry check provided the actual landlord’s details, and upon contact with the owner of the property, we were informed the applicants had never lived at the address.

Needless to say, tenancy was not advised.

As part of Diligent’s standard tenant referencing service, letting agents benefit from our unique profiling system, which automatically flags applications falling into a potentially high risk category. This enables us to conduct the appropriate tenant referencing activities to help eliminate rogue applications.

Letting agents that use Diligent also benefit from:

Common sense grading
Legal & Rent cover
Clear and concise reports
An agent-only service
Great value

To find out more about Diligent and our tenant referencing services, just follow this link.

5 things Letting Agents should ask Tenant Referencing Companies.

Fri, 12 Dec 2014 09:36:00 GMT

Landlords are essential to any letting agent business. Every effort should be made by letting agents to not only satisfy existing landlords but also to try and encourage new landlords to use their services. It should also be remembered that not only should the landlord be satisfied but so should the tenant.

The role a referencing company plays in this market cannot be understated; get the reference right and everyone is happy; get it wrong and all parties suffer from a sub-standard service.

In recent years, there has been a steady increase in the number of tenant referencing companies springing up to offer their services. To the uninitiated eye, most seem credible. However, by asking the following questions, you will have more of an understanding of the effect a particular company will have on your business:

1. Does the company apply common sense grading?

All too often, letting agents receive recommendations as a result of a formulaic point scored computer process. Whilst these systems are easy to create, they are often inaccurate, incomplete, miss vital information, and do not allow for applications to be jointly assessed.

The referencing company should possess experienced personnel who are able to apply the personal touch and in cases where the property application involves more than one prospective tenant, the referencing company should jointly assess the application.

2. How does the referencing company protect your business?

From the outset, the referencing company should be protecting your business by eliminating rogue tenancy applications. To have the ability to identify the less than honest individual, the referencing company will need an intelligent system, experience and the ability to establish the true position.

Once the application has been approved, tenancy issues can still arise. In these situations, does the referencing company try to resolve the problem or do they just refer to a disclaimer?

3. Are the referencing reports produced clear, concise and easy to understand?

The reports produced bycompanies working on behalf of landlords and letting agencies can prove to be extremely confusing, containing credit scores, demographic data, and vague N/A answers.

Ideally, the reports should be narrative and easy to read and therefore possess the ability to be understood by all of the interested parties.

4. Is the referencing service also made available directly to landlords?

You have worked hard to obtain your landlords. Some of the tenant referencing companies also work for landlords; what is stopping a direct relationship occurring?

5. Does the company offer great value?

Upon clarifying the above points, you will have more of an understanding of the service you can expect to receive. Once you have been given the price for referencing, remember to check to see if any additional charges are made for companies, guarantors, overseas cases and applications that are urgent.

Is rent and legal protection available and if so, what is the cost? Note - this can also be a very good gauge as to the standard of referencing, as there is a clear correlation between referencing and Legal & Rent protection charges.

If the answers to the above points are giving you cause for concern, then click here .