A rental application service is selling extra data protection for $20. Not everyone is sold

Key points

  • Critics say the platform is capitalising on fears of identity theft.
  • InspectRealEstate’s CEO says he genuinely wants to help tenants protect their data. 
  • The real estate industry was rocked by data breaches late last year. 

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A rental application platform is offering to withhold identification documents from real estate agents at an additional cost of $20 to renters.

The tenancy application portal 2Apply launched the service in response to high-profile data breaches such as the Optus, Harcourts and LJ Hooker hacks.

Emma Jenkins was unsettled by the charge, which she discovered while looking for a new home. Credit:Nick Moir

But the platform has attracted scrutiny from renters and experts who are critical of charging for increased privacy protection at a time when consumers are nervous about identity theft.

2Apply Verify is offered to tenants when completing an application for a rental. The company uses the services of fraud prevention company GB Group to verify a tenant’s identity, and then vouches for them when they apply for a rental, instead of submitting their documents to the real estate agency.

The verification is valid for three months and will cost tenants $20. It is offered alongside a background check from consumer credit reporting agency Equifax, which will cost a tenant $30.

Digital Rights Watch program lead Samantha Floreani said it was a step in the right direction, but felt it was unreasonable to charge tenants a fee for enhanced privacy and security.

“It turns privacy protection into a commodity rather than a human right,” she said. “People who don’t have the means to pay for that protection will have to go without. Privacy should be available to everyone, not just something with people who have the means can enjoy.”

Floreani said third-party middlemen taking rental applications was a better privacy solution than the old model of many agencies collecting and holding information, in some respects.

“If we can minimise that then it’s worth exploring,” she said. “But a third-party doing it off renter’s back for profit? I think it would benefit from closer examination from regulators about how these services are being used.“

Sydney renter Dr Emma Jenkins discovered the product while applying for a rental with her parents. She was shocked to see the platform asking for money to protect her data.

“It feels like they’re like: ‘do you want all that sensitive information you just uploaded not to get stolen? Then pay us’,” she said. “It’s like… it’s already there? What are you doing [to protect my data] now?

“If it was in response to recent data breaches it’s absolutely the worst way you can go about it, and it seems really disrespectful to their users.”

Melbourne renter James Cusack used 2Apply when looking to rent with friends in October, and felt it required too much personal data.

“It was a long process and I felt a lot of the questions were unnecessary,” he said. “They asked for so much. It’s not like I was applying for a bank loan, I just wanted somewhere to live.”

James Cusack said he thought it was weird tenants were asked to pay for additional services. Credit:Simon Schluter

Cusack did not think tenants should have to pay extra for the services.

“I thought it was pointless. Why should I pay money just to apply for a rental,” he said. “Where’s that money going to? I can see people who are really struggling to find a rental falling for it.”

2Apply is owned by Queensland company InspectRealEstate, and used by about 3000 real estate agencies across Australia, New Zealand and the UK. It hopes to be a one-stop-shop for tenants and agents and is among third-party rental platforms that have come under scrutiny for their handling of sensitive data.

InspectRealEstate (IRE) chief executive Andrew Reece was dismayed by the criticism, and said his company’s ethos was to give tenants the choice to speed up the application process and protect their sensitive data.

He did not want to appear to be taking advantage of tenants.

“Our motto is help and care,” he said. “I sold six of my investment properties to invest in IRE. We genuinely care.”

Ignite, a rental application platform owned by REA Group, offered a similar verification service, but it was rolled into their $29 Equifax check charged to tenants. However, Ignite still sends on the identification documents of paying tenants to real estate agents.

Snug, the other platform in this space, offers no identification verification product.

Real Estate Institute of Australia president Hayden Groves felt 2Apply’s product could benefit the industry and the public.

“If a third party is going to be able to vouch for that [identification] information and store it safely, and securely it does take some of the risk away from the agent,” he said.

“[But] there’s still an abundant risk about [data breaches] occurring, no matter who you are.”

Groves thought it was a fair price for tenants to pay for peace of mind, and that the charge should not be redirected to agents as it was of no tangible benefit to them.

Tenants need to submit personal information when applying for a rental property.Credit:Peter Rae

However, Renters and Housing Union member Alex Gruenewald criticised the service.

“It’s essentially a cynical attempt to capitalise on the fact that the rental situation is so acute,” he said. “It plays on people’s fear of losing data.”

He also questioned its usefulness given the verification feature was an opt-in service for agents.

Tenants’ Union of NSW chief executive Leo Patterson Ross agreed.

“It’s not a useful program and I think it’s pretty cheeky to be charging $20 in any event,” he said. “They are passing the costs to tenants with no guarantee it will deliver on the promise.”

Patterson Ross said the NSW government was looking to introduce a new digital identification system, which would be a safer way to protect tenant’s information.

Jenkins said she felt 2Apply should provide the service for free to all applicants, if at all.

“The types of people who are interacting with this platform are stressed out, desperate people, and it’s just a slap in the face to get people to pay more money when they’re really stressed,” she said.

Reece said the service was charged to the tenant because it was meant to benefit them, rather than the agent. He said it could be superseded by a new, improved identification solution in later years which may or may not include a fee for tenants.

“The journey is not finished,” he said. “We’re learning what we can in the process and we will continue to improve it.”

A spokesperson for the Office of the Australian Information Commissioner said the Privacy Act prohibits the collection of personal information that is not reasonably necessary for the activities of the business and the over collection of personal information increases security risks.

“Businesses should only collect personal information where the collection is reasonably necessary and store it securely,” the spokesperson said.

Many real estate agencies are not covered by the Privacy Act if their annual turnover is $3 million or less.

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