Serial Fraudster

Published on Tuesday, 15 April 2014. Posted in Case Studies


Following the tenancy commencing problems arose in relation to the credibility of the tenants following a request from a third party for the refund of £6,700 paid from their credit card without their permission for the deposit and advance rent. The Landlords, Mr and Mrs C, subsequently complained that the Agent (instructed on a tenant find only basis) had failed to undertake the necessary referencing checks on the tenants which, had they done so, would have exposed the applicants as serial fraudsters.


In this case, both tenant applicants used aliases and provided fake documentation to support their application. In fact, only one of them took possession of the property and promptly sub-let it to a number of sub-tenants without authority and without passing on further rent to Mr and Mrs C. The Agent had only referenced one applicant on the understanding that he was to pay the rent. He provided documentation including a copy of his passport, bank statements, pay slips and a previous landlord’s reference. After viewing the documents, I considered that it was not obvious they were fakes or that the Agent should have necessarily been put on notice from this information that there was anything wrong with the application. However, it was also clear that the Agent had failed to check some of the references provided. In particular, they failed to contact the previous landlord to determine the veracity of the written reference which had stated that the applicant had been resident at an unnamed address in the UK for the previous four years. Nor did I see any evidence of an employer’s reference being taken. No form of ID or proof of address and residence was taken for the other applicant. Significantly, no credit checks were made for either applicant. I concluded that, if such checks had been undertaken, it was possible, but not certain, that the fraudulent applications may have been discovered; it was unclear if the aliases used and the related information belonged to real people or were fictional.


I was persuaded that the Agent should have had concerns about the applicants when they proposed to pay approximately £6,700 to cover advance rent and the security deposit with a third party’s credit card. Instead, the Agent relied on a fraudulently signed written authority to deduct the money from that credit card. It transpired that the innocent third party had not given his authority to make this payment and the monies stolen from him had to be returned by Mr and Mrs C. The Agent compensated Mr and Mrs C for the full amount and made a further goodwill offer of £1,000 in recognition of their shortcomings in service. I deemed this offer to be fair and reasonable compensation. In making this decision, I was satisfied that the Agent had recognised their part in the significant aggravation, distress and
inconvenience experienced by Mr and Mrs C, particularly when they discovered that they had been the victims of serial fraudsters, who were subsequently convicted of this and other similar offences. I also took into account that the Agent was also a victim of the fraudulent activity, suffering income loss as a result, and that they had taken steps to ensure similar failings did not occur again.



Section 7 of the TPO Code of Practice requires agents to be diligent in checking for potentially fraudulent applications, especially when they are conducting the referencing procedure themselves and not using a referencing provider. Not only do thorough checks assist in highlighting potential problems to the landlord, they also benefit the agent by identifying potentially problematic issues at an early stage which, if left un-addressed, often lead to significant losses in time, resources and income in the future.