Other tech

The data proptech startups are collecting just to rent a home is freaking out people

- April 21, 2023 2 MIN READ
Choice renters
CHOICE Consumer Data Advocate Kate Bower and CHOICE Senior Campaigns and Policy Advisor Rafi Alam
You might wanna think twice before using proptech platforms like 2Apply and Snug to apply for a home. 

New research from CHOICE has revealed that over 40% of renters have been pressured to use these third-party platforms, which could lead to data breaches, extra costs, and exclusion from housing.

CHOICE consumer data advocate Kate Bower says 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,” she said

“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.”

The CHOICE report uncovered four major areas of concern associated with rental tech.

Firstly, 41% of renters said the felt pressured by an agent or landlord to use a third-party service when applying for a home, according to Bowers.

“Renters are often given no option but to use RentTech to apply for properties, pay rent, or request repairs,” she said.

“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.”

Secondly, 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 tenancy references, and proof of income.

What happens to that data and whether it’s monetised and onsold is unclear, alongside ongoing concerns around hacking and data breaches.

The third issue is that third-party rental platforms are costing tenants more money just to find somewhere to live.

Bower said a quarter of renters in the survey were made to pay 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,” she said.

Meanwhile, automated decision-making systems are becoming an increasingly common part of rental application systems, but the assessment criteria are unknown and there are fears around algorithm-led discrimination, according to Bower.

“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,” she said.

“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.”

CHOICE is calling for urgent reforms to ensure renters are protected from the risks created by rental technologies. 

Bower said they have four key reform areas for the federal and state governments: updates to the Privacy Act to protect consumers. a federal inquiry into automated decision-making, legislating an economy-wide ban on unfair trading practices, and modernising state and territory residential tenancies acts to tackle any potential harms from the use of rental tech. 

“As the risk of data misuse and data breaches continues to grow, so too does the risk to consumers,” she said.

“The government needs to act quickly and strengthen Australia’s privacy laws to ensure they are fit-for-purpose and protect consumers effectively,”