The weirdest thing happened when my husband and I moved into our new rental home this winter. As we were unpacking the moving truck, a man we didn’t know walked up to the house.
“Do you know where the landlord is?" he asked. "I applied to rent this house but never heard back."
We’d signed the lease a month before, but according to this stranger, he'd applied online that very week, and even turned over a $25 application fee.
Perplexed, we put him in touch with our landlord, who told us the property had been fraudulently advertised on Apartments.com, a popular online marketplace, for $700 cheaper than the listing she'd created. The house, obviously, wasn’t actually for rent.
John Breyault, vice president of public policy, telecommunications, and fraud at the National Consumers League, says these rental scams are more common than people think. According to the FBI's most recent Internet Crime Report, there were more than 11,000 complaints about real estate and rental scams in 2019 — and that doesn't account for the many thousands of fraudulent listings that go unreported.
Over the last year, as the coronavirus pandemic has forced many property owners to pivot to virtual showings and online lease-signings, rental scams have surged across the country. In Thorton, Colo., three families fell for the exact same rental scam last April — each one losing upwards of $2,000 in the process, according to KDVR in Denver. Just last month, a California couple handed over $13,000 to someone pretending to be a landlord, the San Francisco Chronicle reports.
The M.O. for these scams is simple. Scammers post fake listings on rental sites like Zillow, Redfin, Apartments.com and Craigslist with the goal of tricking people into paying phony application fees and rent deposits. These fake ads are usually copycat versions of past or current listings, and often use ripped photos from legitimate ones.
Online payment apps like Venmo and Zelle have made it easy for scammers to get money without ever meeting a would-be renter. And once that transaction is over, it's nearly impossible to get your money back.
Before that stranger showed up outside our new home, I had no idea how easy it was to fall victim to a rental scam. So I asked Breyault how my husband and I could protect ourselves if we're ever in the market for a new rental. Here’s what he told me.
Never put money towards a house or apartment you haven’t seen
If you’re looking for a rental, make sure you’ve laid eyes on it before dishing out an application fee or deposit. Ditto personal information like banking details or your social security number.
How you choose to “see” a property in the middle of a nationwide pandemic ultimately depends on your own comfort level. An in-person viewing is ideal for helping you decide whether you want to rent a place (plus, you’d likely get to meet the landlord). But a Skype or Zoom tour is better than not seeing a place at all.
Still, it’s not out of the question for a scammer to send over a fake video tour — especially since many rental properties are already including these in their ads. If you have no choice but to rely on a video tour, ask to do it live.
If you’re moving from out of town, and a Zoom tour isn’t an option, Breyault suggests asking a family member, friend, or colleague to see the place for you.
Either way, don’t rely on pictures alone. “No good landlord would be willing to have you sign a lease on a home without showing it to you first,” he says.
Beware of how you’re asked to pay
Scammers often ask to be paid by wire transfer, or through a payment app like Venmo, because it's hard to reverse these payments. Some scammers even ask victims to put money on gift cards and give them the code on the back — which is a less-traceable way of swindling people out of cash.
Keep in mind that most landlords will ask for a paper check or another secure form of payment, and will only request payment after you've seen the space, filled out an application and passed a background check.
Take your time
Scammers also reel people in with cheaper-than-market value rent prices to instill a sense of urgency that causes people to spend before they think. If you find a great deal in a great neighborhood, it can be tempting to want to jump on it before someone else does.
If the person who posted the listing responds to your inquiries by urging you to put down a deposit fast, don’t give in to the rush.
“The risk of fraud is much greater than possibly missing out on a great deal,” Breyault says.
Do your research beforehand
As a rule of thumb, if a potential location’s price, location, or amenities sound too good to be true, they probably are. If you’re new to an area or unfamiliar with the local cost of housing, do some research by browsing comparable listings before you start to look for a rental. That way, you’ll keep scrolling when you find a pristine, two-bedroom apartment in midtown Manhattan listed for $1,000 a month.
“If a rental is both nicer and dramatically lower than what’s on the market ... that’s definitely fishy,” Breyault says.
Report the listing
If you think you’ve spotted a fraudulent listing, Breyault advises reporting it to the website where you found it. Most sites make it easy to flag suspicious rentals through a built-in button on the listing itself or via the site's help center.
If you’ve already put money towards a fake rental, report it to your state attorney general’s office. Make sure to alert your bank if you've given out any personal or financial information, and consider placing a freeze on your credit report.
Breyault recommends filing a complaint on Fraud.org; a non-profit website that reports consumer complaints to the Federal Trade Commission.
“A complaint might not result in you getting your money back or the fraudster being put behind bars, but all the data that gets collected builds cases that can result in arrest and prosecution,” he says.