New national research from CHOICE has revealed over 40% of renters have been pressured to use RentTech to apply for a home - putting them at risk of data breaches, extra costs and exclusion from housing.
Some tenants are also being forced to use these third-party rental platforms, such as 2Apply and Snug, to pay rent, request maintenance and communicate with agents or landlords.
"Finding a home as a renter is already an incredibly difficult and draining experience. Our research found RentTech platforms are taking advantage of people's basic need for a roof over their heads to collect excessive data and charge unfair fees," says CHOICE consumer data advocate Kate Bower.
"People who rent deserve a guarantee that their personal data is safe and isn't being used to exploit or harm them. Unfortunately our research found that renters are seldom granted this assurance," says Bower.
"Reform to the Privacy Act is urgently needed to ensure renters are protected from the many risks created by RentTech," says Bower.
CHOICE's report revealed four major areas of concern associated with RentTech:
1. Lack of choice: 41% of renters were pressured by an agent or landlord to use a third-party service to apply for a home.
"Renters are often given no option but to use RentTech to apply for properties, pay rent, or request repairs. Our research found two in five people who rent were pressured by an agent or landlord to use a third-party service to apply for a home," says Bower.
2. Data insecurity: 60% of renters were uncomfortable with the amount and type of private information requested in their rental application.
"If you've ever applied for a home to rent, you know it can require huge amounts of personal information. Our national survey found 60% of renters were uncomfortable with the amount and type of private information requested in their application. This includes information such as identity documents, employer and tenancy references, and proof of income," says Bower.
"RentTech platforms are being used to collect and store even more data than traditional methods, such as online forms hosted by real estate agencies. This leaves this highly personal information prone to data breaches, along with the potential for it to be used in ways that have nothing to do with providing accommodation," says Bower.
3. Added costs: 25% of renters have paid for a tenancy check.
"Third-party rental platforms are for-profit businesses which often force or pressure tenants to pay additional fees, including fees to pay rent, penalties for failed payments, and even the costs of their own background checks. Our national survey found one in four renters had paid for a tenancy check," says Bower.
4. Invasive technologies: 21% of young renters (aged 18-34) reported a tenant score was used in their rental application assessment.
"Automated decision-making systems are becoming an increasingly common part of rental application systems. Snug, for example, produces a "Match Score" for rental applicants which uses the personal information submitted by a renter to indicate their suitability for particular properties. A sore lack of regulation in this market means these automated decision-making systems could increase barriers and discrimination for renters, potentially excluding some people from housing," says Bower.
The case for reform:
CHOICE is calling for Federal and State governments to take the following steps to ensure renters are protected from the risks created by rental technologies:
- Reform the Privacy Act to ensure Australia's privacy laws are up to date and fit-for-purpose for consumers.
- Conduct a Federal inquiry into automated decision-making.
- Legislate an economy-wide ban on unfair trading practices.
- Modernise state and territory residential tenancies acts to tackle RentTech harms.
"As the risk of data misuse and data breaches continues to grow, so too does the risk to consumers. The government needs to act quickly and strengthen Australia's privacy laws to ensure they are fit-for-purpose and protect consumers effectively," says Bower.
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