Rental Property Scams Are Insidious
Tough Economic Times
Economic downturns may cause people who need housing to jump at online deals that result in financial loss and heartbreak.
Tough economic times bring forth clever machinations from predators eager to harvest the hopes of innocent people that will receive nothing in return, except additional hardship.
Slum landlords have created a perpetual problem in large Midwestern cities and the advent of the Internet has provided them with a new outlet for taking advantage of renters. In addition to these landlords, bunko artists that own no property are collecting security deposits and personal information from unsuspecting potential renters electronically.
This article is the result of an investigation of hard copy classified ads and Internet advertisements posted on rental search engines, online news sites, Craigslist, and similar sites from 2010 through early 2017.
Craigslist posts an automatic generic warning about possible scams for all readers and everyone looking for housing should be careful.
Unscrupulous Security Deposit Scams
Prior to public use of the internet, some landlords placed reasonable-sounding rental ads in the local newspaper, interviewed several potential renters and required a security deposit of a few hundred dollars from each applicant. This is not ethical.
These landlords kept all of the deposits, while renting to only one applicant. Locally established Tenants Unions involved themselves and helped to largely end this security deposit scam.
A good rule for renting a space is to pay a deposit and the first month's rent, but only after you have the lease or rental agreement signed by all parties involved and the key in your hand.
Always Get a Receipt and a Key
Via the Internet, some landlords now request large deposits and even the first month's rent to be mailed without the benefit of paperwork or a key. This is not an honest practice.
One local homeowner recently advertised a furnished 500 square foot space in a nice house online at a reasonable rent. The applicant with whom I spoke found the space to be smaller than 300 square feet and musty-smelling. It was also crammed with furniture and other items.
The homeowner requested $400 be mailed to her 30 days in advance of a move-in date before she would accept rental references. The references had to be sent in a separate hard copy mailing, not by email. All this raised red flags. Further, no rental paperwork would be done and no key would be provided.
If applicants agreed to mail a money order or cash, this scam artist received the money, provided no receipt, lease, or rental agreement, or key, and refused to acknowledge any rental relationship on the date of move-in. This occurred four times in quick succession before law enforcement agencies became involved. Unfortunately, not of the swindled individuals were able to collect the money owed to him or her.
Some unscrupulous "landlords" accept deposits and first month's rent from applicants for abandoned properties they do not own.
Other Online Rental Scams
In this scam, a "landlord" takes outdoor photos of a particular house or apartment building, posts them online with a description of rental arrangements, and waits for responses.
On receipt of responses, the advertiser requests
- A security deposit by money order or cash and/or
- Enough personal information in order to perpetrate Identity Theft.
Sometimes they request a link to an online credit report that you have generated that is full of personal information.
One perpetrator in my city advertised a supposed house-sharing arrangement, but would not reveal his/her name or address. The person refused to meet potential renters, but demanded their names, addresses, past two rental references, and past two employment references.
From the rental and employment references, anyone might contact a clerk in the office that has not been fully trained to refuse personal information from files that are not even under lock and key. This is a sad reality in many businesses.
The failure of secured records can include a bank name, a bank account number (from rental checks), a Social Security Number, phone numbers, and other information. It is wise to inform rental offices, landlords, and employers firmly that you wish no information be given out about you.
A Scam With no Pictures
A bolder form of this scam is one in which the advertiser does not post pictures of the house and property, but lists only an address.
The advertiser does not provide a map with these ads often written in broken English, but worded to project supposed authority. They state that the advertiser needs no deposit or lease, but will be coming around to inspect the property regularly and it had better be in good shape. This sounds strange.
Ads may state something odd, such as that the advertiser owns only one inexpensive apartment in a whole building, but my city has no apartment ownership of that sort, except expensive condos. Ads then ask that you to send to a blind email address your name, address, phone number, fax number, occupation, employer name and address, and other data. This is suspicious.
If you look up the advertised address in a maps engine, it is usually a vacant lot, an abandoned house, or a business that is not a rental property. This is definitely am ID Theft scam.
Another version of this swindle is one that includes soft-pornography images of women and requests the above information along with a link to your online credit report. Never answer such an ad.
"Have We Got a Job For You"
Another unscrupulous tactic is to scan advertisers that need apartments or rooms and offer them a resident manager position that requires only six hours of work per week in exchange for free rent and utilities. Legitimate ads state that the position is full-time.
An email link to the scam takes the candidate to a professional-looking property management site of which the company does not exist. The website is fake.
The website may list actual apartment complexes, but the management of those sites have never heard of the property management company on the website and are not connected to them.
The company has no listed phone number and is not registered with the Secretary of State as a business. The website has no contact information, but furnishes an online form to enter all of your personal information—which you had better do quickly so that the company can call you in 30 days for an interview. It won't happen, but your identity has been stolen.
Another scheme is one in which a renter with a property management company subleases an apartment or room, partially or fully furnished, without paperwork; and insists that payments be given to him or her instead of to the company.
The original renter pockets the money and does not turn it over to the rental company. People desperate for cash or overwhelmed by responsibilities may not see the consequences this action has for their credit histories, or that this action is criminal.
Some of these scammers ask the subletting person to pay the entire remaining lease in a lump sum, but without any paperwork. In fact, some of these swindlers accept the money from more than one person, all of whom show up to take possession of a room or apartment, only to find someone else living there.
When renting a room, apartment, or house:
- Do not provide your Social Security Number, unless you have toured a legitimate property in person and are ready to submit to a credit check. Check out rental companies with the Better Business Bureau and Chamber of Commerce. Take care in considering home-shares—you might want a background check of the person.
- Do not send an online credit report to an individual to whom you will supposedly be renting or subletting, especially if you don't know their name and address and have verified this information, or if you have never met the person. Meet any individual “landlord” in public in a safe place before conducting further business.
- Do not enter personal information into online forms unless you are sure that the rental company is legitimate and the website is secure.
- Do not mail money to anyone for a security deposit. Insist upon a rental agreement or lease signed by you and the landlord or rental company and insist on the key to the property and make sure that it works. Often, you will pay the security deposit and the first month's rent together. Do not hand over the money if there is no signed paperwork or key. Insist upon a receipt, even if you pay by check. If this is an individual landlord instead of a rental company, ask to see that person's identification. If you are entering a housemate/roommate situation, you may want to require a background check from the person that will be renting to you.
- Be as informed as possible. If you are unsure about rental matters, ask an attorney or a local tenant's association.
This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.
Questions & Answers
Whom do I call if I feel as if I'm living in a "traphouse"?
If you suspect that you are living in a house that is home to illegal drug deals or illegal use/possession of illegal drugs; or prostitution and human trafficking, then you can call the police department to report this. Use their non-emergency number and call from someplace other than your house. You can also visit a police substation to ask advice and file a report.
© 2009 Patty Inglish MS