Technology’s hand in the rise of rental scams

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Scam artists and criminals flock to wherever opportunities are. And since everyone needs a roof over their head, it shouldn’t surprise you to learn that less than savory characters are drawn towards real estate as a tool for scamming unsuspecting people out of their money.

Over the past few years, in particular, rental property scams have become common all over the United States. Being aware of these scams may help you avoid becoming the next victim.

According to a recent survey conducted in June by Apartment List, an estimated 43 percent of renters have encountered suspicious listings in their hunt for new housing. Over half of these individuals report reaching out to the individual behind the listing before realizing that it was a scam.

“While the vast majority of people who encounter fraudulent rentals don’t end up losing any money to the scam, that’s not the case for all renters,” Market Watch explains. “More than 6% of renters, or roughly 5.2 million people, reported a financial loss due to a rental scam. Younger adults, who are already more likely to be rent-burdened, are more likely to lose money in a rental scam — nearly one in 10 renters under the age of 30 has lost money in such a scenario.”

One of the biggest rental scams in recent history occurred earlier this year in Largo, Florida when Nicole Johnson, 29, and David Johnson, 32, allegedly portrayed themselves as the owners of a rental property and started lease agreements with 12 different families. The couple received more than $25,000 in deposits from these families and left the state prior to the scheduled move in day when multiple “tenants” showed up at the same time, only to discover that they’d been duped.

“She told me she owned the house and she was moving into another house. I gave her a $2500 deposit,” said Karen Hilo, one of the rental scam victims. Another victim forked over a hefty deposit of $4,300.

While not nearly as costly, another popular scam involves asking prospective tenants to pay for a background check in order to process their rental application. Typically asking for $30 to $60, the scammer runs off with the money and never gets back with the applicant (or lies and says their application has been denied because of an issue with the background report).

And it’s not just renters that get scammed. Landlords also have to be careful not to work with tenants who look for ways to expose unsuspecting property owners. People posing as tenants will often use fake funds for a deposit, or rent with the intention of posing as a landlord and subletting the property to someone else.

You might think you’re too smart to get hooked into a rental scam, but some of the tactics used by today’s scammers are quite advanced. Take the Johnsons as an example. They physically showed the property to their victims and even had documents to prove ownership (because the property was in the family and they shared names with the real owners). If you want to avoid problems, you have to be hyper-vigilant.

For starters, never make any payments or sign any lease agreements online without ever seeing the property. Scammers will often come up with excuses as to why you can’t see the property and then pressure people into sending a “refundable” deposit to reserve the property.

You also need to be wary of getting too involved with a listing that isn’t descriptive. While some landlords simply aren’t good at crafting descriptions, a listing that lacks key details – such as the address or information about rooms and square footage – should send internal alarm bells off.

When it comes to forking over a deposit or making a monthly rent payment, never deal in cash. Criminals prefer hard-to-trace payments and cash is their favorite method.

“A tenant should never pay a landlord cash for anything,” Brabender Law advises.“This is especially true for a security deposit and first month’s rent. The tenant should also avoid wiring money, using Western Union or any other type of hard-to-trace cash equivalent such as Moneygram, Bitcoin or MoneyPak.”

If you ever feel like you’re in a situation where it’s possible you may be getting scammed, your intuition is probably pointing you in the right direction. You’ll know a legitimate transaction when it’s in front of you and won’t have to question the motives.

To create an added layer of protection, it’s always smart to ask for a second opinion from a friend or loved one whom you trust. Having a fresh set of eyes review the deal will further reduce your chances of being scammed. As the saying goes, it’s better to be safe than sorry!

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