By a Biometrica staffer
As the saying goes, where there’s a will there’s a way. A perverse version of this axiom is also applicable to fraudsters and criminals, who are always on the lookout for an opportunity to scam others. Whether that be through niche hobbies like coin collecting or, as we have written about in the past, through big life moves like moving or buying houses.
Within this latter category, another type of fraud that is quite common is rental fraud. A 2018 survey found that around 5.2 million renters said they had lost money to rental fraud, with one-third saying they had lost more than $1,000.
As to why rental frauds may seem like an attractive scam to a criminal, the Federal Trade Commission (FTC) says: “Scammers know that finding the right apartment or vacation rental can be hard work, and a seemingly good deal is hard to pass up.” In other words, they prey on everyday people’s insecurities and limitations. The goal here, the FTC adds, is “get your money before you find out.” To do this, they “try to lure you in with the promise of low rent, or great amenities.”
According to the FTC, there are two common types of rental fraud. The first is where scammers “hijack” a real rental property by taking the details and pictures of a legitimate ad, changing the contact information, and posting it on a different site. More sophisticated versions of this will see the scammer hack and use the email or user accounts of the actual property owner. On the other hand, scammers also just make up rentals. These “phantom” rentals can either be entirely fictitious or are existing places that aren’t actually for rent.
The people behind these scams will likely ask for an upfront payment, a fee to view the property, or a deposit to reserve the property. Then, they will make off with the money. Targets of this type of fraud are most commonly individuals looking to move from other cities or countries, who may not have time to view a property before signing a lease. During the height of the pandemic as well, reports emerged of vulnerable groups who were concerned about the eviction moratorium being targeted.
Here are some tips experts suggest on how to protect yourself from rental fraud. Keep in mind that none of these are effective in isolation. Try to cover as many of these as possible to be thorough in your background check of who you are doing business with:
- Make sure you are communicating with the property owner or a legitimate real-estate corporation, not a series of middlemen
- Do not trust anyone who asks for a deposit just to view a property
- Be wary of someone who starts talking about money right away, rather than focusing first on the property and features
- Through online research, vet the person or organization brokering the rental deal. Look up license and certification proof where applicable
- If possible, try to avoid handing over any money without visiting the property first
- Conversely, be wary of any owners or middlemen who repeatedly claim to be out of town and therefore unavailable to meet, even if they say they are in the military or work abroad with the government
- It may go without saying, but listings with few or no pictures are likely fake. Similarly, pictures that have a watermark (a faint/translucent logo superimposed on the image) are likely not original and have been copied from other websites
- If a scammer communicates with you outside typical business hours, this may be an indication of a scam based outside the U.S. Keeping an eye on this isn’t 100% accurate, but can be a good baseline indicator to double-check for your own safety
- Where possible, check the rental agency’s website to verify their authenticity. Also, for apartment complexes or realtors, check the internet for any reviews of the property or agency
- If possible, contact actual customers to get a referral, rather than going off what may be on the company or agent’s own website
- It may sound counterintuitive, but if the property owner/advertiser does not ask you for any background (not sensitive) information, like whether you work or your current landlord’s referral, it may be an indication they don’t care because it is a scam
- Some landlords or rental companies might ask for a thorough background check, but if they ask for “exorbitant” fees to conduct one, then it might be a sign of a scam
- Avoid conducting transactions or email or phone, especially those that might require you to disclose financial or personal information
- Keep in mind that wire transfers are difficult to recover once they go through, and that legitimate transactions will rarely (if at all) be conducted via cryptocurrency, which facilitates fraud as it is unregulated and untraceable. Also do not pay in cash, as that can be difficult to recover due to a lack of a paper trail
- Try and compare the prices of other rental properties in the same area. While it’s not necessarily true that all the prices in one area or even in one building will be the same, doing this can give you some clue as to whether you are being bilked or whether a deal really is too good to be true
- Be suspicious if someone says that rent must be paid in cash, without a receipt, or that they will not sign a lease. That is a major red flag
- And most obviously: read over any lease or rental agreement carefully to be aware of what you are signing before you hand over any money or personal information.
If you suspect you have been the victim of a scam, call local law enforcement as well as your bank to halt any money transfer.