AI Seen as the Biggest Future Fraud Threat to Client Money
Chloe Grima ·
As technology advances, so do the fraudsters using it. For letting agents handling client money, spotting suspicious activity before funds move is essential to keeping that money safe.
To assess the extent of these challenges, we conducted research examining the prevalence of financial fraud within the lettings industry, the threats on the horizon and how confident agents feel in their safeguards.
The findings highlighted significant concerns, revealing that more than one in three letting agents (36%) lack complete confidence in their ability to identify potentially fraudulent or suspicious transactions before funds are transferred.
How Common Is Financial Fraud in Lettings?
Our survey found that 35% of letting agents had experienced or identified an attempted financial fraud or scam associated with their letting's activities within the preceding 12 months.
The findings identified several forms of fraudulent and suspicious financial activity, with varying levels of prevalence among respondents:
26% reported encountering phishing attempts or fraudulent impersonation of landlords or tenants.
21% identified suspicious rent payments originating from third parties.
18% reported exposure to AI-generated fraud, impersonation or deepfake scams.
Phishing and payment scams remain the most familiar threats, but newer tactics are already reaching the sector. Fraud is getting more complex, and detection has to keep pace.
Why AI Worries Agents Most
Although AI-related scams were not the most frequently encountered type of fraud, 29% of respondents named AI-enabled fraud as the biggest financial security threat facing the sector in the future.
This was followed closely by tenant and payment fraud at 27%, while 12% selected money laundering or suspicious funds.
The result is a close call between old and new, but the direction of travel is clear. AI can produce convincing messages, identities and impersonations at scale, so it’s easy to see why agents are uneasy.
Are Current Safeguards Enough?
When we asked agents how confident they were in identifying fraudulent or suspicious client money transactions before funds were transferred. 64% said they were completely confident.
36% were not.
That’s a notable gap, given that more than a third of agents had faced an attempted fraud in the past year. It’s also worth asking whether complete confidence is always justified when the methods are changing this quickly.
Chris Mason, Chief Operating Officer shares his thoughts:
"The fact that more than a third of letting agents aren’t completely confident in their ability to identify a suspicious client money transaction before funds are transferred should be a real concern, particularly when over a third have encountered attempted financial fraud in the last year alone.
"The emergence of AI-enabled fraud is making the threat increasingly sophisticated, and it’s telling that the industry already considers it the greatest financial security risk moving forward, despite more traditional forms of fraud remaining prevalent.
"AI means a message, a voice or even a video can look completely genuine, so agents can no longer rely on instinct alone. Regularly reviewing your controls and training your team on what these scams look like is what will keep client money secure as the threat evolves."
Keeping Client Money Safe as Fraud Evolves
Fraud is changing and letting agents need to change with it. Technology helps, but it can’t remove every risk. People and process matter just as much.
A few habits make a real difference:
Verify changes to bank details by calling a number you already hold, never one supplied in the request
Question third-party payments and treat unexplained ones as a prompt to investigate
Pause on urgency, since pressure to move money quickly is a classic red flag
Train your team to recognise deepfake and voice-clone tactics, not just suspicious emails
Fraud is evolving faster than most agents can track, so now is the time to test your safeguards. Ask yourself: if a convincing request for a bank detail change landed today, would your team catch it?
At The Letting Partnership, we build those habits into how we handle client money, because no tool replaces people who know what a suspicious transaction looks like.
