Majority of tenancy fraud cases 'not caught', according to Callcredit research

A shocking 90 per cent of all tenancy fraud cases are going undetected - while nearly three-quarters of all UK local authorities did not uncover a single case of housing fraud in 2011.

These are the alarming statistics to emerge from a new survey published today by the public sector experts at Callcredit Information Group, who carried out research into the crime that costs the state an estimated £1bn a year.*

Using data obtained from local authorities via the Freedom of Information Act, along with published data, Callcredit also found that:

  • 85 per cent of all UK local authorities have no dedicated tenancy fraud strategy or dedicated fraud team;
  • Those local authorities that did have a fraud strategy or dedicated team, 85 per cent detected a fraud; whereas those local authorities that did not have a strategy or dedicated team only 19 per cent detected a fraud.
  • There are significant regional differences between fraud detection rates, with 88 per cent of authorities in Wales failing to detect any fraud compared to 18 per cent in London;
  • The most common type of tenancy fraud is unlawful letting (40 per cent) followed by non-occupation of a principal home (38 per cent).

The survey's findings are contained in a new white paper entitled 'Shutting the Door on Tenancy Fraud', which has been published by Callcredit and will be available from 14th March 2012. Copies of the report can be obtained by registering here.

Andrew Davis, Director of Public Sector at Callcredit, announced the survey findings at the Public Sector Efficiency Expo, at London's Olympia Two. Commenting on the report, he said: "Regrettably, public sector fraud is soaring and one of the biggest areas is tenancy fraud. It is a sad fact of life that wherever social housing is found, tenancy fraud is too. We know from our research that the UK's social housing waiting list now exceeds 2.3m homes, and that the problem of tenancy fraud is endemic across all areas - it is not just restricted to metropolitan districts.

"Clearly from the results of our survey it is clear to see that those local authorities that do have a dedicated strategy and fraud investigation teams are beginning to yield results.

"That does not have to mean investing more money, but simply reallocating resources in a more efficient way. For instance, we found that local authorities that used data matching services detected 59 per cent more fraud cases than those that didn't."

Mike Haley, Director of Public Sector Fraud at the National Fraud Authority, which co-ordinates efforts across government to reduce fraud against the public sector - estimated to cost £25billion annually - said: "Now that a light has been shone on the scale of Housing Tenancy Fraud, we call upon all local authorities to implement a thorough strategy going forwards to detect and prevent it, using identified best practice including the use of credit reference data".

* Source: National Fraud Authority