Rental fraud is on the rise, fuelled by a highly competitive rental market and an abundance of low cost, or free-to-list platforms for advertising property, such as classified ad sites
In fact, research conducted by YouGov in 2013 estimated that over 1 million people had fallen victim to rental fraud, with at least a further 315,000 new victims each year, showing just how widespread the problem has become.
Reported incidents of rental fraud have increased by 44% from 2014 to 2015, rising from 2216 reported incidents in the year ending March 2014, to 3193 in the year ending March 2015. However, it is highly likely that these figures are a huge underestimate of the real scale of the problem, as the Local Government Association claim that only 5% of fraud incidents are actually reported, due to embarrassment on the part of the victim.
Unfortunately, classified advertising sites have become breeding grounds for scammers who can post fake or misleading adverts at little to no cost and with very few security measures or verification checks to pass. In fact, it is estimated that bogus landlords are making £775 million per year through rental scams, with an average cost per victim of roughly £2400.
Property classifieds site TheHouseShop.com have now implemented a unique ownership verification process, using Land Registry databses, that is the first of its kind in Europe, and which, when combined with their numerous other security and safety checks, sets a new standard for security in the classified advertising space.
For an online classifieds business, safety and security are paramount concerns, and verifying the authenticity of advertisers can be extremely difficult, as Co-founder ofTheHouseShop.com, Nick Marr, explains:
“The difficulty with the online classified business is finding the perfect balance between empowering genuine customers, without making them jump through too many hoops, while ensuring you have sufficient security checks in place to guarantee that both users, and their ads, are genuine.”
“Scammers have become highly sophisticated and it isn’t always easy to spot fake or misleading ads – even manually reviewing adverts can still allow some bogus ads to slip through the net.”
“To be honest, I think it’s a bit of a dirty little secret in the industry, because we all know that this is going on, but no one wants to step up and talk about it openly because they don’t want to admit that fraud is happening on their website. And for many players in the classified ad space, there is quite frankly very little they can do to prevent it.”
“Thankfully, because we deal exclusively in property, we can take advantage of official records and databases – that may not exist for other types of product – to help verify the authenticity of adverts and create a safer place to find property.”
TheHouseShop.com have recently worked with Land Registry to implement a unique new verification process that they believe could hold the key to preventing this type of fraud.