Letting agents in the UK are facing a double threat: rising tenancy fraud and stricter compliance rules.
Fraudulent rental applications shot up by 140% last year, with forged documents becoming so sophisticated they’re almost impossible to spot by sight. Miss just one, and you risk placing an unreliable tenant in a landlord’s property. And with the Renters’ Right Bill set to cause serious eviction delays, removing them won't be easy.
At the same time, the pressure to stay compliant is mounting. Fines for right to rent breaches surged by 577% in early 2024, with penalties reaching up to ÂŁ10,000 per occupier, even for first-time offences.
That’s where government-approved Identity Document Validation Technology (IDVT) comes in. By digitally verifying tenant ID, you can take the pressure off your staff while also protecting your landlords.
In this blog, we’ll dig into what IDVT is, why you should use it, and how it can help you overcome tenancy fraud and compliance hurdles👇
In the lettings industry, IDVT digitally verifies a tenant’s identity documents, such as passports or driving licences. The technology also helps to confirm a tenant’s right to rent a property, overcoming the issues inherent in manual verification. It's provided by government-approved Identity Service Providers (IDSPs).
IDVT uses a range of advanced digital checks to detect fraud and ensure authenticity. These include:
By combining these technologies, IDVT offers a faster, safer, and more reliable way to verify a tenant's identity, helping you stay compliant, while offering a smoother experience for tenants.
Although IDVT automates the process of verifying tenant documents, letting agents must still carry out an in-person or virtual 'Imposter Check' to confirm that the person is genuinely who they claim to be.
| Manual checks | IDVT |
| Risk of human error | Automated fraud detection |
| No real-time verification | Instant document verification |
| Increased admin | Full audit trail |
| Physical checks and slower processing | Remote checks and faster processing |
When conducting right to rent checks manually, you need to meet the tenant in person and inspect their identity documents. During this process, you must verify that the document appears genuine and that the person standing in front of you matches the photo.
One of the biggest challenges with manual checks is that they rely heavily on an "eye test," placing responsibility on agents to decide whether or not an ID is legitimate.
Other than that, there are other significant challenges:
IDVT, on the other hand, automates the validation of identity documents, taking the pressure off your team. The technology scans the documents, checking security features like watermarks, microprinting, and embedded chips to assess authenticity.
Plus, with IDVT, you can conduct right to rent checks remotely, all in line with government-approved standards. This not only reduces your exposure to fraud but also ensures full compliance with legal requirements.
IDVT doesn’t just protect your landlords; it also protects your reputation and the future of your agency. Here’s how 👇
Failing to conduct proper right to rent checks can be financially devastating.
For instance, first-time offenders can face fines of up to ÂŁ10,000 per occupier and ÂŁ5,000 per lodger. Repeat offenders can be fined up to ÂŁ20,000 per occupier and ÂŁ10,000 per lodger.
Using IDVT helps you stay compliant, massively reducing your risk of costly penalties.
Around 94% of fraudulent applications involve forged documents, many of which are too advanced to detect by sight alone. Miss one, and you could end up placing a fraudster in a landlord’s property, with costly and time-consuming consequences.
As eviction delays will extend under the Renters’ Rights Bill, preventing this scenario is critical. IDVT helps you detect tampered or fake documents early, so you can stop fraud in its tracks.
Compliance mishaps don’t just have financial consequences. They can also seriously harm the trust you've built with your clients. Using IDVT shows that your agency takes compliance and security seriously, giving you a stronger position in an increasingly competitive lettings market.
Manual ID checks are time-consuming, admin-heavy, and prone to human error. IDVT simplifies the entire process by allowing you to verify identities remotely and securely, reducing the admin burden on your team.
Plus, because every check comes with a full audit trail, you have clear evidence to hand if anyone questions your processes.
While IDVT automatically verifies tenants' identity documents, it’s only one part of the tenant referencing process.
To properly assess a tenant’s suitability, you need to carry out a full range of referencing checks, which include:
This helps you build a complete and accurate picture of who you're placing in your landlords' properties.
Here are some factors to keep in mind before finalising your IDVT provider:
Are you just looking for technology that helps you verify right to rent? Or do you need a provider who can support full tenant referencing, including credit checks, residential checks, and income verification?
If you decide to use IDVT, you must ensure your provider is certified under the government’s Digital Identity and Attributes Trust Framework (DIATF). This certification shows that they meet stringent standards for data protection and security, ensuring compliance.
Ask for a detailed cost breakdown and double-check whether there are any hidden fees. If your tenancy volumes change month to month, you’ll want a flexible pricing model that grows (or shrinks) with your business, not one that ties you into paying for checks you don’t use.
If there’s ever a technical problem or a failed check, you need a provider that’s easy to reach, with proper UK-based support by phone or chat. Ask about their service level agreements (SLAs) so you know exactly what kind of help you can expect if something goes wrong.
At Goodlord, we help you do more than just verify tenants’ identities. Our tenant referencing product is seamless and end-to-end.
We partner with a government-certified Identity Service Provider (IDSP) to run our IDVT checks. They’re trusted by over 180,000 people every month for secure identity verification, and are both ISO 27001 accredited and certified under the UK’s Digital Identity and Attributes Trust Framework (DIATF).
IDVT is just the start. Our full tenant referencing service checks across four key criteria: identity, credit, residential history, and income and affordability.
We use tried-and-tested techniques like payroll verification to prevent financial fraud, while we also integrate with HMRC and Open Banking.
Once you send the link to your applicant, we gather and verify documents, and chase referees.
Everything is built into the Goodlord platform, providing a seamless journey from start to finish. You can customise the reference type for each applicant, toggle IDVT checks on a case-by-case basis, and track every reference in real time through your referencing dashboard.
Our UK-based in-house referencing team handles your references. They’re dedicated to providing you and your tenants with a seamless journey, backed by the best technologies.
They're also on hand to answer any questions, and will proactively step in to ensure that even the most complex references are managed with ease.
If all of that sounds good, hit the button below 👇
This article is intended as a guide only and does not constitute legal advice. For more information, visit gov.uk.