It is always thrilling to discover a new rental property in your neighborhood or a different city, unless you fall victim to a scam. Scammers create fake rental listings that either do not exist or are not available for rent to deceive individuals and fraudulently obtain money, as stated by the Federal Trade Commission. These scammers typically request payments such as application fees, security deposits, the first month’s rent, or a combination of these charges.
According to John Breyault, vice president of public policy, telecommunications, and fraud at the National Consumers League, once the payment is made, the scammer posing as the landlord or listing person disappears. Experts warn that many people have been deceived by fraudulent rental listings. In 2023, there were 9,521 real estate fraud complaints, resulting in over $145 million in losses, according to the Federal Bureau of Investigation’s Internet Crime Report.
Real estate fraud, as defined by the agency, involves financial losses related to real estate investments or fraud concerning rental or timeshare properties. While searching for rentals online is convenient, experts advise caution to avoid losing hundreds or thousands of dollars. For instance, if you fall for a scam requesting a security deposit or the first month’s rent, which typically equals a month’s rent, you could be at risk of losing a significant amount of money.
A report by Rently revealed that 62% of respondents who encountered rental scams lost more than $500, with 48% losing over $1,000. Additionally, 8% reported losses exceeding $5,000. To identify rental scams and protect yourself, experts recommend being vigilant and taking certain precautions. Scammers often create a sense of urgency to prompt immediate payment, so it is advisable to allocate sufficient time for your search to avoid falling into this trap.
Rental scams are prevalent in competitive housing markets with limited supply or following natural disasters. Scammers may exploit personal information available on the dark web, making it crucial to be cautious of unsolicited messages offering rentals. If contacted via text or phone call, check the area code, and scrutinize email addresses for suspicious characteristics. Be wary of payment requests through wire transfers, gift cards, cryptocurrency, or payment apps, as these are common red flags for scams.
Experts emphasize the importance of meeting landlords or listing agents in person and touring the property before making any payments or commitments. If unable to visit the property personally, request a virtual tour or ask someone trustworthy to inspect it on your behalf. Additionally, be cautious of unusually low-priced listings, as they may be bait for potential victims. Always compare listing prices with others in the area and remain skeptical of offers that seem too good to be true.
