The Audit Commission estimated the level of tenancy fraud as involving 50,000 properties in 2009, while official figures from the National Fraud Authority suggest that it costs the public purse £900 million a year, but fraud analysts believe the figure may be even higher.
The topic of housing fraud is extremely high profile at the moment, with particular scrutiny from the government in terms of criminalising the activity as well as several high profile documentaries recently aired on the BBC, including a special edition of Panorama highlighting the problem.
Social housing tenancy fraud is simply deemed as the use of social housing by someone not entitled to occupy the home. It includes the unauthorised sub-letting of all, or part of a property, submitting false information in a housing application to get a tenancy, misrepresentation of circumstances or identity, and wrongful succession when the property is no longer occupied by the original tenant (including so-called ‘key selling’), and non-occupation by the tenant as their principal home.
Crucially, freeing up existing housing means reduced waiting lists for housing providers and could also mean fewer new properties needing to be built. Reducing housing tenancy fraud also significantly reduces the cost of providing temporary accommodation.
This fraud is not just restricted to inner-city properties; rural areas are also affected. Nor is it any longer acceptable for housing providers to ‘turn a blind eye’ as long as the rent is being paid on time.
The government is taking the problem so seriously that it is preparing to introduce legislation that would see housing tenancy fraud as a criminal offence. Grant Shapps, the housing minister, said recently, “This year, the Coalition is determined to end this scandal. Why should someone on a six-figure income enjoy a fantastically-subsidised council rent while those in real need languish on the waiting list? And why is it so easy to get away with sub-letting your council house at market rent and simply pocketing up to £1,000 a week at taxpayers’ expense?”
Shapps, who is leading the push to criminalise tenancy fraud, is planning to launch a consultation process to tighten up perceived loopholes and weak rules, with any savings going towards building new social housing. Penalties being considered could include fines and even imprisonment in particularly serious cases.
Clearly, the majority of social housing tenancies are legitimate, although errors can occur when tenants change or moves are not accurately updated.
Companies such as Civica have been developing anti-fraud systems to reduce the problem using their experience and knowledge of the social housing sector coupled with access to multiple data sources, including housing management systems, to provide an effective solution to housing fraud.
Anti-fraud techniques have been developed that use data matching and risk profiling to identify high certainties of housing fraud which can then be followed up and investigated. Through the use of these techniques, it is possible to significantly reduce the problem of tenancy fraud which, according to the BBC, costs taxpayers an estimated £5 billion a year and places an unnecessary burden on the housing supply.
These sophisticated techniques enable housing providers to analyse, manage and reduce misuse. By reviewing extensive data-matching platforms, investigators can quickly get a prioritised list of potential at-risk properties and alerts of any addresses which may warrant further investigation. The data highlights when an authorised tenant is not in residence, when non-authorised persons are occupying a particular property, instances where an authorised tenant is dead, and when a property has been advertised by a commercial property service.
Simply assembling a summary of potential at-risk homes is not enough; success often hinges on the housing provider’s ability to assemble a team of investigators, housing and legal officers – all working together.
An investigation can be quickly completed following a data sweep to highlight addressees where fraudulent activity might be taking place. Investigators can follow up and pursue potential frauds with warning letters sent to offending addresses to remind tenants of the legal ramifications of breaching their agreements. This relatively cost-effective process can often yield quick wins as offending tenants know they are under scrutiny and are aware their housing provider believes suspicious activity is taking place.
Nick Gordon is sales director for housing at Civica.