Case Study: The Applicant Who Sent Us AI-Generated Payslips

A few weeks back we processed an application from someone who looked, on paper, like a perfectly solid prospect. Payslips supplied, ID supplied, everything where it should be. The stated income comfortably covered the rent. The kind of applicant any landlord would be pleased to see walking through the door.

Then we ran the bank check.

None of the income on the payslips appeared in his bank account. Not one of the figures matched. When we put this to him, he told us the money had been going into a different account, which he then couldn't produce a statement for. The application collapsed pretty quickly after that.

The payslips were AI-generated. Convincing enough to pass a casual eye, but completely fabricated.

This is the new normal

A few years ago, a fake payslip meant someone with a printer, some Photoshop skills and a bit of patience. The barrier to entry was meaningful. Today, anyone with a free AI tool and ten minutes can produce documents that look professionally formatted, internally consistent, and almost indistinguishable from the real thing. Same goes for utility bills, bank statements, employment references, you name it.

It isn't only payslips either. Share codes can be screenshotted and edited. ID documents can be tampered with or invented wholesale. The kinds of fraud that used to require organised effort are now within reach of anyone who fancies trying their luck.

For us this hasn't fundamentally changed the way we work, because we've always used professional referencing services that verify income against bank data rather than just against documents. The bank check is what caught this application, and it's the bank check that will keep catching this kind of thing. But if a landlord is doing their own referencing, working from the documents an applicant hands them, they're exposed in a way they simply weren't five years ago.

The "they seem nice" trap

Most landlords we speak to who've ended up with a bad tenancy didn't get there because they were cutting corners. They got there because they wanted to believe the applicant in front of them. It's a very human instinct. You want the property let, the applicant is presentable, the paperwork looks fine, and the desire to get a tenancy signed off quietly overrides the doubts.

That's exactly the gap fraudsters work in. They aren't trying to fool a forensic accountant. They're trying to fool someone who already half wants to be persuaded.

What we're seeing in the Nottingham market right now

There's another factor worth flagging, because it's specific to where the market is at the moment. Rents in Nottingham have come off a bit from the peaks we saw over the last couple of years. Some landlords haven't fully adjusted to that, and they're holding properties at rents the market isn't really supporting anymore.

The tell is in the applicant mix. If the only people applying for a property are higher risk cases, DSS-only with no guarantor, applicants with significant adverse credit, people whose stated income doesn't quite add up, that's usually a signal the rent is sitting above the level that attracts a competitive pool of quality tenants. Genuine, well-referenced applicants have options. They self-select out of overpriced properties.

So you end up with a particular set of conditions all at once: a landlord keen to hit a rent figure the market isn't really delivering, a thin pool of applicants weighted toward higher risk, and someone in that pool with paperwork that superficially passes muster. That's how bad tenancies start.

And then there's the legal side

The other piece of this puzzle is the Renters' Rights Act. The Act has made it considerably harder to end a tenancy, even where the tenant is in clear breach. Section 21 no-fault possession is gone. The grounds for possession that remain are slower, more contested and require proper evidential preparation. The court system that has to process all of this hasn't yet been resourced or restructured for the volume coming its way, and the delays in possession proceedings are real and getting worse.

In practical terms, that means getting the referencing wrong is far more expensive than it used to be. A bad tenant who would once have been out in four months under a section 21 might now be in the property for the best part of a year or more, with rent unpaid throughout and the property at meaningful risk of being left in poor condition at the end of it.

What I'd recommend

Two things, really.

First, reference properly. Use a professional referencing service that verifies income against actual bank data, not just documents. Check share codes through the official government service rather than accepting screenshots. Look at the whole picture rather than ticking boxes. This, frankly, is one of the genuine reasons a managing agent earns their fee in a market like this.

Second, get rent protection and legal expenses cover on every tenancy. The premiums are modest compared to the exposure. For the next year or two at minimum, until the courts and the new possession system have settled into something workable, that insurance is the difference between an inconvenience and a serious financial hit.

If you'd like us to look at how we'd reference a particular applicant, or you'd like to talk about adding rent protection to a property we already manage for you, get in touch.