Rental fraud usually means one of two quite different crimes. In the first, a tenant pays a holding deposit and first month's rent to someone advertising a flat they have no right to let, and never sees the money again. In the second, an applicant passes referencing with forged documents, moves in and stops paying.
Different victims, but the same weak spot. Both depend on documents and bank details that are easy to fake and hard to check. Open banking helps with both, because it replaces what someone claims about a bank account with what the bank itself confirms.
How big the problem is
The numbers point in two directions. Data from Action Fraud and the Metropolitan Police, analysed by Just Landlords, shows rental fraud reports falling by 18% over three years, from 4,982 cases in 2023/24 to 4,092 in 2025/26. Over the same period total losses went up by 20%, so fewer people are being caught out but each one is losing more.
Fraud aimed at agents is moving faster. Goodlord flagged 41 in every 1,000 applications for suspected fraud between July 2025 and June 2026, and saw suspected fraud rise by almost 40% in 2025 compared with the year before. Fake employment references were the fastest-growing type, up 226.6%, and referee fraud and identity manipulation both more than doubled. Much of that is put down to AI tools, which make a convincing payslip or bank statement cheap and quick to produce.
Fraud against tenants
The usual pattern is simple. Someone advertises a property that doesn't exist, belongs to someone else, or is being sublet without permission. They push for a quick decision, ask for a holding deposit and often the first month's rent by bank transfer, and then disappear.
Some schemes are more elaborate. London Trading Standards has warned about fraudsters using genuine deposit protection certificates, obtained through real scheme membership, to make fake lets look convincing.
In almost every case, the weak point is the payment. A tenant sending money to an account number from an email or a WhatsApp message has no real way to know who controls that account.
Fraud against agents
Applicant fraud usually targets referencing. The point is to look more affordable or more reliable than the applicant really is, whether through edited bank statements and payslips, an employer or referee who is actually a friend with a phone, or someone else's identity altogether. When it works, the agency and landlord can end up with months of arrears, legal costs and a void period on top.
What open banking adds
Open banking gives agencies two tools that work against both kinds of fraud.
The first is consented access to bank data. With the applicant's permission, an FCA-regulated provider can read information directly from their bank, such as who owns the account and what income has come into it over a set period. For referencing, that changes where the evidence comes from. Instead of a document the applicant hands over, the agency gets data from the bank. There's no PDF to edit. If a salary arrives every month, the agency can see it, and if it doesn't, no amount of formatting will make it appear. It also confirms that the person paying the holding deposit, and later getting the deposit back, is the person named on the tenancy.
The second is the payment itself. When a tenant pays a holding deposit or move-in money by pay by bank, the request arrives with the agency's details already filled in, and the tenant approves it in their own banking app using their bank's usual checks. The tenant isn't typing an account number from a message, and the agency receives money with the right reference, from an account the tenant has just authenticated, and knows within seconds that it has arrived.
What tenants should know about sharing bank data
Tenants are right to be careful with their financial information, and open banking was designed with that in mind.
Nothing is shared until the tenant decides to connect their bank and approves what will be shared. Access to account information is read-only, so it can't move money or change anything. It also expires after a set period, and the tenant can withdraw it earlier through their bank or the provider. The tenant never gives their login details to the agency, because they log in with their own bank. Providers have to be authorised by the FCA, and the data is covered by UK GDPR.
For a lot of applicants, that's a better experience than emailing three months of bank statements to an agency inbox.
Documents supplied by the applicant | Open banking check | |
|---|---|---|
Where the evidence comes from | The applicant | The bank, with the applicant's consent |
Can it be edited | Yes, and it's getting easier | No |
Time taken | Often days | Usually minutes |
Confirms who owns the account | Rarely | Yes |
What the agency ends up holding | Full statements in email and files | Only what the applicant agreed to share |
Making move-in harder to exploit
A few habits go a long way. Don't ask applicants to pay holding deposits or move-in money to bank details sent only by email, and tell them early on exactly how you'll ask for payment, so an imitation stands out. Offer a bank-verified income check as an alternative to uploaded statements and payslips. Check that the account paying the holding deposit belongs to the named applicant, and return deposits to that same verified account at the end. Keep what was requested, checked and paid in one record rather than spread across inboxes.
How Fena helps
Fena is an FCA-regulated open banking provider covering both halves of this. Our account information APIs let applicants share verified income and account ownership straight from their bank, with their consent. Our payment links and QR codes let tenants pay holding deposits and move-in money into your client account from their banking app. Using one provider for both means the account you verify is the account that pays you.
Common questions
What can the agency actually see?
Only what the tenant agrees to share, usually who owns the account and a summary or list of income and transactions for a set period.
Does this replace referencing?
No, it strengthens it. Bank-verified income and ownership checks replace the parts of referencing that are easiest to forge. Right to Rent and other checks still apply.
Is it compliant with UK GDPR?
Open banking data is personal data, so agencies need a lawful basis for using it and should keep only what they need. Using consented bank data can actually reduce the number of sensitive documents an agency stores.
Can a holding deposit paid this way be reversed?
There's no chargeback scheme for pay by bank payments. The Tenant Fees Act rules on when a holding deposit must be refunded still apply.
Article by
Gosia Furmanik
CEO and Founder
Published on
