24 Jul 2013

Callcredit pitches for tenancy fraud work

It is a sad fact of life that wherever social housing is found, tenancy fraud is discovered too. Although the percentage is mercifully low, it still costs UK taxpayers £1.8bn each year.

Woah there, that's 50% more than the government's ridiculously low estimate for the total cost of benefit fraud!

The Audit Commission estimates that 98,000 social homes in England could be subject to tenancy fraud, a rise of 96 per cent in just three years. And it’s not only the public purse that is losing out; fraudsters prevent people with legitimate housing claims from living in a decent property.

Now a Leeds-based company is doing something to tackle the problem. The Callcredit Information Group¸ a credit referencing, marketing and consumer information firm, is working with councils to detect and prevent this kind of fraud. So far, Callcredit has worked with around 40 councils but it is planning to increase this number.

Andrew Davis, director of public sector at Callcredit, said: “Tenancy fraud is at its highest where you’ve got a situation where there’s a big gap between what you pay for a public sector home and what you pay for a private sector home in the same area.”

According to Callcredit’s research, tenancy fraud is most apparent in the capital which, as far as detected cases are concerned, accounts for the lion’s share of fraudulent activity. This is followed by the West Midlands and East of England.

Yorkshire and Humber ranks fifth in the league table.

“The problem is particularly acute in London but big city centres like Leeds will be places where fraudsters will operate,” said Mr Davis. “It happens where people are desperate for housing. But you don’t really know (the scale of it) until you start looking.”

Of the most common types of detected tenancy fraud, non-occupation, is the most prevalent. Put simply, this relates to people who have never lived at the property, despite claiming to reside there. Non-occupation as principal home is also a big issue – this means that the tenant may have lived in the house or flat at some point but now lives somewhere else entirely. In many of these cases, the person in question is found to be illegally sub-letting the accommodation.

In a few instances, Callcredit has uncovered Right to Buy frauds. These include tenants providing false information and claiming the Right to Buy on an illegally sub-let property. There are an increasing number of these kinds of cases.

“Illegal sub-letting is a criminal offence,” said Mr Davis. “But once it is discovered, it’s possible to get the keys back very quickly.”

Last week Callcredit struck a new contract with Sandwell Council in the West Midlands. Lee Birch, business development manager at Callcredit, said: “We are pleased to be able to help Sandwell take action against offenders that provide false information to jump the housing queue, fail to occupy their property, pass a property to a friend or family member or sub-let their home for financial gain.”

Previous research carried out by Callcredit found that there are significant regional differences for fraud detection rates. It also discovered that more than one in eight UK local authorities has no dedicated tenancy fraud strategy or specialist fraud team.

Mr Davis said: “About 90 per cent or more of tenancy agreements are absolutely fine, it’s the 10 per cent we focus on.”

In less than three years, Callcredit has honed its approach to tenancy fraud. In a nutshell, the company works with councils in order to combine the local expertise of housing and fraud officers with residency data matching.

This works in a number of ways, including identity and documentation assessment to financial checks.

He's not telling us much, no note of success rates.

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