You may want to think twice before using proptech platforms like 2Apply and Snug to apply for a property.
New research from CHOICE has revealed that more than 40% of tenants have been pressured to use these third-party platforms, which can lead to data breaches, extra charges and housing exclusions.
Kate Bower, consumer data advocate for CHOICE, says finding a home as a renter is already an incredibly difficult and exhausting experience.
“Our research found that RentTech platforms take advantage of people’s basic need for a roof over their heads to collect excessive data and charge unfair fees,” she said.
“People who rent deserve assurances that their personal information is safe and not used to exploit or harm them. Unfortunately, our research showed that tenants rarely get this assurance.”
The CHOICE report highlighted four major concerns related to rental technology.
First, 41% of renters said they felt pressured by a real estate agent or landlord to use a third party when applying for a home, Bowers said.
“Tenants are often left with no choice but to use RentTech to request properties, pay rent or request repairs,” she said.
“Our research found that two out of five people renting were pressured by a real estate agent or landlord to use a third party to apply for a home.”
Second, 60% of those people were uncomfortable with the amount and type of private information requested in their rental application. That includes sensitive data such as identity documents, employer and rental references, and proof of income.
What happens to that data and whether it is monetized and resold is unclear, in addition to ongoing concerns about hacking and data breaches.
The third problem is that third-party rental platforms cost tenants more money to find a place to live.
Bower said a quarter of tenants in the study had to pay a rent check.
“Third-party rental platforms are for-profit companies that often coerce or pressure tenants to pay additional fees, including rent-paying fees, fines for failed payments, and even the cost of their own background checks,” she said.
Meanwhile, automated decision-making systems are becoming an increasingly common part of rent application systems, but the judging criteria are unknown and there are fears of algorithm-led discrimination, Bower said.
“For example, Snug produces a ‘Match Score’ for rent applicants that uses the personal information provided by a renter to indicate their suitability for certain properties,” she said.
“A severe lack of regulation in this market means these automated decision-making systems can increase barriers and discrimination for tenants, potentially excluding some people from housing.”
CHOICE calls for urgent reforms to ensure tenants are protected from the risks posed by rental technologies.
Bower said they have four key areas of reform for the federal and state governments: privacy law updates to protect consumers. a federal investigation into automated decision-making, legislating unfair business practices across the economy, and modernizing state and territory leases to address potential harms from the use of rental technology.
“As the risk of data misuse and breaches continues to grow, so does the risk to consumers,” she said.
“Government must act quickly and strengthen Australia’s privacy laws to ensure they are fit for purpose and effectively protect consumers,”