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It’s exciting to find something new place arrive rent In your neighborhood or new city. Unless, of course, you’re being scammed.
In so-called rental listing scams, scammers will defraud you of your money by fabricating listings that are not available for rent or that do not exist. according to to the Federal Trade Commission. Scammers will typically ask for an application fee, security deposit, first month’s rent, or a combination of these fees.
“Once the payment is made, the (so-called) landlord or listing person … disappears,” said John Breyault, vice president for public policy, telecommunications and anti-fraud at the National Consumers Union, a consumer advocacy group. .
Potential tenants lose cash to rental scams
Experts say it’s not uncommon for individuals to fall victim to fraudulent rental listings.
A total of approximately 9,521 real estate fraud complaints were received in 2023, resulting in losses of more than $145 million, according to The latest FBI cybercrime report. Those numbers are down from 11,727 victims and more than $396 million in losses in 2022.
The agency defines real estate fraud as a loss of money resulting from a real estate investment or fraud involving a rental or timeshare property.
While it’s convenient to search for a new rental online, experts urge prospective renters to be cautious because you could be out hundreds to thousands of dollars if you’re not careful.
For example: Let’s say you fall for a scam that requires you to pay a security deposit (usually equivalent to one month’s rent) and/or the first month’s rent. Nationally, the median monthly rent in December was $1,373. according to to apartment listings.
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a separate Report Rental automation platform Rently found that 62% of respondents who experienced rental scams lost more than $500, with 48% losing more than $1,000. The report said the proportion of victims defrauded was smaller, 8%, for amounts exceeding $5,000.
The survey, conducted in November, surveyed 500 U.S. adults who had rented an apartment, condo or house in the past five years and experienced or were aware of rental scams and fraud.
Experts say if you need a new place to rent this year, here are a few things to keep in mind to determine if a rental listing is a scam and what to do.
4 danger signs to watch out for
While this is a common tactic among different types of scams, rental listing scammers try to create a sense of urgency to get you to pay immediately, Breault said.
To combat this problem, experts urge renters to allow plenty of time to search. Doing this can help reduce this sense of urgency.
Rental scams may also intensify in competitive, undersupplied real estate markets or following natural disasters.
“Fraud tends to follow the news and natural disasters in many ways,” Breault said. “Especially if there’s a sudden increase in the number of people needing housing.”
1. Unsolicited messages regarding tenancy
Given the large volume of messages, personal information such as mobile phone numbers and emails are easily accessible on the dark web Data leakage Tracy Kitten Goldberg, director of fraud and cybersecurity at Javelin Strategy and Research, said that in recent years.
For example, if you receive an unsolicited message about an apartment available for rent, “that would be a red flag,” she says.
“Especially if you haven’t contacted anyone,” whether you get a text message or a cold call, she adds.
Experts say if someone contacts you via text message or phone asking for rental information, check the area code of the phone number. If it’s outside your area, be careful.
If you receive an email, check the sender’s address. Does the address contain multiple characters, such as a mix of letters, numbers, and various punctuation marks or symbols? Or is it coming from a personal account like Gmail or Yahoo, but disguised as a business email? Ketten Goldberg says if the answer to one of these is “yes,” delete it immediately.
2. Requires unusual payment methods
Breault said it’s “a huge red flag” if a so-called landlord or listing agent asks you to pay an application fee or first month’s rent via wire transfer, gift card or cryptocurrency.
Also be careful if they ask for payment through payment apps such as Apple Pay, CashApp, PayPal and Zelle. Every Federal Trade Commission.
“What all these payment methods have in common is that the money goes from you to the recipient almost instantly,” Breault said. Even if you determine it was a fraudulent payment, the transaction is usually irreversible.
Federal laws regarding fraudulent loss claims generally don’t apply to such transactions, he said. So if you come across these payment options from a so-called listing agent or landlord, stop the application process immediately.
3. Refusal to meet or show property in person
“You should always meet with these people face-to-face and visit the property before filling out any type of paperwork,” says Keten Goldberg.
Breault says if a landlord or agent makes up excuses as to why they can’t meet with you in person, or why you can’t view the rental property in person, that in itself should be a red flag.
If you’re out of town or moving to a new city and don’t have the ability to review an apartment in person, ask for a virtual tour of the space, experts say. If possible, ask a friend or relative to visit the property on your behalf.
“That’s really the litmus test of whether an apartment is real,” Breault said.
4. Asking price is unusually low
Be wary if a rental listing is “unusually low priced” compared to similar properties in an area, Breault said.
“Scammers create lists like this because they know it will attract a lot of eyeballs and potential victims,” ​​he said.
Be sure to compare the listing price to other listings in your city or area of ​​interest, and be wary of offers that may be too good to be true, Breault said.
“Do bargains exist? Absolutely, but so do a lot of scams,” Breault said.
