Cost-effective recovery routes to social-housing tenancy fraud

The full scale of Britain’s social housing fraud is not known for certain – but all agree it is a serious problem. Based on our analysis of more than 30 providers managing a cohort of 250,000 properties, it is estimated that at least 160,000 social homes are unlawfully sublet in the UK – representing a direct cost to the public purse running into the billions.

While data-sharing is critical to preventing social housing fraud, there are also differing routes to the cost-effective recovery of fraudulently sub-let homes.

Experian’s knowledge and experience of how serious fraudsters operate in the commercial arena suggests that multiple tenancy fraud is far more prevalent and widespread than previously thought. Determined ‘career fraudsters’ make no distinction between public and private sector opportunities – they simply cash in on the best opportunities. As a result, multiple tenancy fraud simply remains too good to ignore.

We’ve outlined the rationale and critical challenges behind the options available to local authorities and housing associations alike including door stepping tenants and developing pre-prosecution legal cases.

But before local authorities start out on detailed investigations of suspected social tenancy frauds, they can quickly flag up high-risk cases to inform and prioritise workloads by using analysis to confirm tenants’ identity and eligibility. Data takes account of a range of indicators to highlight:

• Tenant not found at tenancy address and found at alternative address.
• Tenant found at tenancy address but also found at alternative address.
• Tenant matched to mortality.
• Tenancy address matched to Mover Alerts.

Results can then be further cross-matched and forensically analysed by authorities and housing associations by comparing and cross-matching all findings against their own internal datasets.

Case study – Hillingdon

Cost-effective data analysis helped pave the way for the recovery of nearly 40 London properties – equating to around £500,000 in realised revenue for the local authority.

The London Borough of Hillingdon is just 14 miles from central London, with a mix of urban and rural communities, right on the edge of the capital. The local authority directly oversees thousands of homes from the edge of Heathrow Airport, to Uxbridge, Ruislip, Ickenham, Northwood and the picturesque villages of Harefield and Harmondsworth. While the vast majority of its tenancies are legitimate, misuse is increasingly in the spotlight across the UK, amid growing concern from the National Fraud Authority (NFA) at an estimated £900 million annual financial loss and reduced availability of social housing for those in acute need.

We helped deliver a timely and cost-effective solution for Hillingdon, with an immediate return on investment. In common with local authorities across the UK, The London Borough of Hillingdon wanted a quick, straightforward and cost-effective way to accurately gauge and verify the level of fraud across its entire social housing stock.

Within 18 months, 36 properties were reclaimed from tenants who had been illegally sub-letting their homes, or who were not entitled to live there.

Cabinet Member for Social Care, Health and Housing, Councillor Philip Corthorne, said: “People who illegally sub-let local authority tenancies are denying those residents in real need of a home. In Hillingdon this is something we will not tolerate and anyone caught faces losing their property for good.”

To date, reclaiming the properties has saved the council around £500,000 and has led to the local authority being recognised across the country for its success. The authority also launched a whistle-blowing campaign to help residents identify fraudsters in their neighbourhood.

Hillingdon resident Toni Butler, had been on the housing waiting list but now lives in a three-bedroom house reclaimed from a fraudster who had been subletting the property.

She said: “I have three children – aged six, two and one – and I have been in temporary accommodation for the last six years. During the six years, while waiting to be housed permanently, I have had to be moved on six occasions. I am relieved to be housed permanently. The children have a garden and I now feel settled. My daughter is pleased to have her own bedroom.”

Hillingdon Corporate Fraud Manager Garry Coote said: “Every call or tip-off made to my team is investigated and we push to reclaim any property that isn’t being lived in by the correct people. Reclaiming these properties helps us save the council money, benefiting all council taxpayers in the borough.”

The NFA places an average UK value of £18,000 on each recovery – equating to an immediate result of around £500,000 for the borough of Hillingdon and its citizens, although arguably London homes have a far higher market value. The authority’s success hinged on access to the breadth and depth of our data, along with the ability to accurately match it with its own internal records, followed by effective and collaborative teamwork between its housing, legal and investigations teams.

Case study – Hammersmith & Fulham

Early last year, the London Borough of Hammersmith & Fulham unveiled a high-profile crackdown on social housing fraud.

But within a matter of months it emerged the authority had recorded stunning results and was recovering an average of £2,680-a-day for the public purse.

The London borough joined forces with Experian to deploy the latest fraud detection and data-matching techniques to analyse its social tenancy records. Experian analysis combined with an in-depth local knowledge of housing staff helped pave the way for potential savings of £654,000 within the first eight months. It is expected to top £1 million this year.

In common with local authorities across the UK, the authority wanted a quick, straightforward and cost-effective way to accurately gauge and verify the level of fraud across its 12,000-strong social housing stock.

We worked closely with Hammersmith & Fulham to provide the intelligence base for the investigation team to review and follow up suspected fraud cases. Our research combined with council officers’ comprehensive, knowledge of their neighbourhood produced stunning results. Within the first seven month around 300 high-risk properties were investigated. In some cases keys were very quickly surrendered following an e-mail, phone call or visit from the local authority. Legal action is being taken against some offenders.

As a result, Hammersmith & Fulham now expects to cut fraud even further after implementing more stringent identity checks on applicants. The authority has also taken a lead with Experian in developing a UK-wide data sharing service accessible to all housing providers.

Councillor Andrew Johnson, Hammersmith & Fulham Cabinet Member for Housing, said: “These stunning results prove our zero tolerance towards fraud is working. Every fraudster profiting from the most vulnerable members of society by unlawfully sub-letting social homes should know they now run a very high risk of being caught.

“Experian is working with Hammersmith & Fulham to enable the investigation team to review and follow up suspected fraud cases. Within the first seven months, around 300 high-risk properties were investigated resulting in savings of £654,000 to the public purse – the equivalent of nearly £3,000–a-day. In many cases keys were very quickly surrendered following an e-mail, phone call or visit from the local authority.

We are continuing our work with Hammersmith & Fulham, to help the authority implement even more stringent identity authentication checks on individuals applying for council tenancies. From here on it is hoped fraud can be prevented from the outset, when residents first apply for social housing.

As a result, Hammersmith & Fulham has taken a lead with Experian in developing a UK-wide data-sharing service accessible to all housing providers.

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