The Daily Telegraph - Saturday - Money
Letting agents use new technology to snoop on tenants’ bank accounts
Letting agents have been criticised for demanding customers hand over access to their entire financial history before agreeing to let properties.
Campaigners have branded the private rental market the “Wild West” after agents used so-called “Open Banking” technology to snoop on tenants’ transaction data.
Letting agents could use referencing systems to discriminate against low income renters as regulation tightens, tenant groups have warned.
Anya Martin, of PricedOut, an affordable housing campaign group, was asked to provide her transaction history via Open Banking when she applied for a tenancy in Southwark, south London. “I felt uncomfortable and I was suspicious, but I had to do it to get the tenancy,” she said.
Open Banking was introduced in 2018 to allow customers to share their current account information securely with third parties. However, while the process brings opportunities for a faster referencing process, it also makes it easier for agents to view extensive financial information.
While it is common for agencies to ask for proof of income, Open Banking
allows them to delve deeper into their customers’ finances than ever before.
Jim Killock, of the Open Rights Group, a campaign organisation, said: “These are sensitive records and many people don’t want to share them but they are forced to because they need to get a property.”
Ms Martin added: “It is such a ‘ Wild West’ situation, they will always find new ways to comb through tenants. Those on higher incomes with better credit ratings will get the properties, and those on lower incomes get pushed out and end up in the shadow, illegal renting sector.”
The Financial Conduct Authority, the City watchdog, regulates the providers of Open Banking and information can only be shared with a person’s consent. As long as a renter consents for their data to be shared, the process is within regulations.
However Michael Deas, of the London Renters Union, said that agents were increasingly using referencing to discriminate against low income tenants since the “no DSS” ruling last year. In September, a judge ruled that it was unlawful for agents to have a blanket policy of rejecting tenant applicants on housing benefits.
Dan Wilson Craw, of Generation Rent, a tenant campaign group, said that agents often used banking data as part of a “filtering process”.
Mark Hayward, of Propertymark, an agent body, said he was not aware of widespread use of Open Banking in referencing across the industry.
Mr Hayward said: “However, open platforms are allowing data to become more accessible and it is important that all data are used appropriately and sensitively and that there are clear guidelines for this in the future.”