More than a third of letting agents have encountered an attempted financial fraud or scam connected with their lettings activity during the past year, new research suggests.
A survey commissioned by The Letting Partnership found 35% had experienced or identified an attempted fraud or scam, while 54% believe agents are now more exposed to financial fraud than they were three years ago.
Just 8% believe the threat has reduced. Phishing and the impersonation of landlords or tenants was the most commonly encountered suspicious activity, reported by 26% of respondents.
Suspicious third-party rent payments were identified by 21%, while 18% say they have already encountered AI-generated fraud, impersonation or deepfake scams.
AI THREAT
AI-enabled fraud is also regarded as the biggest emerging financial security threat by respondents.
Some 29% identify it as the biggest future threat facing the sector, ahead of tenant and payment fraud at 27% and money laundering or suspicious funds at 12%.
The research also raises questions about the safeguards agencies have in place around client money.
While 64% say they are completely confident their business could identify a fraudulent or suspicious client money transaction before funds were transferred, the remaining 36% did not express complete confidence.
CLIENT MONEY
The Letting Partnership Chief Operating Officer Chris Mason(main picture) says: “The fact that more than a third of letting agents aren’t completely confident in their ability to identify a suspicious client money transaction before funds are transferred should be a real concern, particularly when over a third have encountered attempted financial fraud in the last year alone.
“The emergence of AI-enabled fraud is making the threat increasingly sophisticated, and it’s telling that the industry already considers it the greatest financial security risk moving forward, despite more traditional forms of fraud remaining prevalent.
“With the Government now looking to strengthen regulation of property agents, there’s an opportunity to ensure that greater professional accountability is matched by stronger financial safeguards. Licensing and qualifications are important, but so too are the client accounting systems, verification procedures and financial controls that protect landlord and tenant money on a daily basis.”
