Spotting Signs of a Rental Scam

May 13, 2009 — Consumers in search of an apartment or house to rent often rely on online rental listings in order to find the right place, especially if they’re looking in another city or state.

Unfortunately, scammers are taking advantage. Some make up phony listings, and try to lure renters with the promise of extra-low rent. They ask potential renters to send money before they see the apartment or sign a lease.

The Federal Trade Commission, the nation’s consumer protection agency, wants to help consumers hang on to their hard-earned money by showing them how they can spot a rental scam. The FTC has developed a new Consumer Alert, Rental Listings May Be Red Herrings.

Rental Listings May Be Red Herrings

Apartment and rental house hunting can be an adventure, but also a real balancing act. Issues like size, location, move-in date, monthly rent, and extra costs — like parking and utility bills — all factor in to a final decision. And many renters face the added challenge of the long-distance hunt, using websites with rental listings to find a home in another city or state.

Whether you’re a first-time renter or already a pro, the FTC, the nation’s consumer protection agency, wants you to know how to avoid getting taken in by a rental scam.

These scams play out a number of ways. Some scammers hijack a bona fide rental or real estate listing by changing the email address or other contact information, and placing the modified ad on another site. The altered ad may use the name of the person who posted the original ad. Other rip-off artists make up listings for places that aren’t for rent or don’t exist, and try to lure you in with the promise of extra low rent. Their goal is to get your money before you find out.

Being savvy when you’re in search of a rental takes some extra effort, but with your money at stake, it’s well worth it. Here are some signs you may be dealing with a scam:

• They want you to wire money. This is the surest sign of a scam. There’s never a good reason to wire money to pay a security deposit, application fee, or first month’s rent. Wiring money is the same as sending cash — once you send it, you have no way to get it back.
• They want a security deposit or first month’s rent before you’ve met or signed a lease. It’s never a good idea to send money to someone you’ve never met in person for an apartment you haven’t seen. If you can’t visit an apartment or house yourself, ask someone you trust to go and confirm that it’s for rent. In addition to setting up a meeting, do a search on the landlord and listing. If you find the same ad listed under a different name, that’s a clue it may be a scam.
• They say they’re out of the country. But they have a plan to get the keys into your hands. It might involve a lawyer or “agent” working on their behalf. Some scammers even create fake keys. Be skeptical, and don’t send money overseas. If you can’t meet in person, see the apartment, or sign a lease before you pay, keep looking.

When you use a bulletin board website, it’s renter beware. But even sites that require additional information like a credit card number can be gamed by scammers. If you find yourself the target of a rental scam, report it to your local law enforcement and also to the FTC at ftc.gov/complaint. Also contact the website where the ad was posted.

Source: Federal Trade Commission press release.

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