The UK has been grappling with rising rental fraud since the onset of the pandemic as tenants whose income, credit and employment have been affected by the economic fallout of COVID-19. A number of UK referencing firms tasked with checking applications disclosed in the first half of 2021, up to a 72% increase in the number of fraudulent tenancy application attempts, the Independent reported.
To help combat this level of fraud, British proptech startup Homeppl has launched two fraud detection tools in line with its current proprietary tech to support agencies in the UK from faulty tenant applications.
One of the two technologies – a document analysis tool – enables letting agents to effectively screen a renter by processing documentation that is analyzed at what Homeppl consider an “even deeper level” compared to existing screening technologies.
The product can detect fraud by spotting inconsistencies and nuances in the document’s typography and font styles. Any fonts dissimilar to those used by banks are flagged that the document has likely been tampered with.
Its second product, dubbed ‘Heimdall’ – named after the mythological Norse god who keeps watch of invaders – leverage Homeppl’s proprietary fraud data to develop an alert for the rental screening process. By scanning various data points, Heimdall can determine an applicant’s legitimacy and recognizes when a fraudster is committing rental fraud multiple times through various agencies.
According to the company, Heimdall was born out of a pet project during late 2021 as an experiment to see whether the tech’s extensive fraud data could be harnessed further. Now, Homeppl intends to increase the power of Heimdall in the near future by harnessing even more internal data points to ensure a wider range of information can be analyzed to detect fraud.
To do so, Homeppl plans to turn towards machine learning and AI algorithms to turbo-charge its capabilities.
“It is no secret that the rental sector is a fast-moving and challenging landscape for agencies to manage today – couple this trend with an unprecedented volume of rental fraud – and it makes for a difficult space for both agencies and landlords to navigate,” said Homeppl CEO and founder, Alexander Siedes.
Founded in 2017, Homeppl’s techstack is unique in it leverages Open Banking, proprietary behavioral analysis and fraud detection tests rather than standard tick-box assessments. It’s also been backed by some of Europe’s top venture funds, including Ascension Ventures, Fair By Design, and JLR Star and became a Barclays Techstars company the same year of its founding.
While much of its technology is meant to keep the bad players from entering the space, Homeppl’s products have also managed to usher more of the good ones in. According to the proptech, Homeppl’s approach means that the around 5 million tenants who are currently rejected by the system would be able to pass checks.
Self-employed, international students and expats can shirk their “invisible” status as the platform approves roughly 95% of tenants. Compare this to more archaic credit check services whose high rejection rate allow ‘good tenants’ to slip through the cracks – an average of 30%.
Following its $1.4 million round in September, Siedes said the company intends to launch into several European cities as it moves towards its Series A round.