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What to know about rental fraud

What to know about rental fraudWhat to know about rental fraud
Renter tips
RentSpree Staff
RentSpree Staff
Calendar
December 7, 2023
time
5
 min read

Summary

Rental fraud is at an all-time high, with scammers looking to take advantage of unsuspecting renters. Before signing your name on your next lease, learn how rental scams work and how to protect yourself from potential bad actors.

According to the FBI’s Internet Crime Complaint Center, there’s been a 64% surge in rental property scams over the last three years. With so many people searching for an affordable place to live, scammers are taking advantage of the heightened demand and targeting vulnerable individuals. 

As a renter, this means being extra cautious when exploring the housing market for your next rental. To protect yourself from falling victim to rental fraud, learn exactly what signs to look out for before you make your next move. 

Understanding how rental property scams work

Fraudsters orchestrate rental scams by fabricating listings for homes or apartments and tricking you into making payments before you realize it’s fake. They typically use one of these two methods:

1. Phantom rentals

Scammers generate fake or “phantom” rental advertisements featuring images of an apartment or home they neither own nor have available for rent. To make listings appear legitimate and appealing to potential renters, they use enticing descriptions, attractive images, and even an alluring below-market price.

2. Ad hijacking

In this scenario, scammers use an ad that already exists but replace the original contact information of the realtor or property manager with their own. 

In both cases, scammers have the same end goal: To steal your money. And while scammers are in the game for financial gain, they can also take your personal information like your name, phone number, Social Security number, or bank account number to steal your identity. 

6 rental fraud warning signs

Recognizing the signs of apartment scams can help you avoid falling victim to rental fraud and find your ideal home as safely as possible. But, you have to know how to spot red flags.  

1. The landlord or agent doesn’t want to meet in person 

If the listing agent or landlord refuses to give you a tour of the property or the rental unit, proceed with caution. Scammers tend to make excuses as to why they can’t physically show it so prospective renters fall into their trap. They may claim they are currently out of the country or convince you to sign a lease with just a virtual tour. Just remember: even virtual tours can be fake if the scammer has access to a property they don’t actually own. 

2. You’re asked to pay up before signing a lease

Scammers will sometimes ask for a security deposit or first month’s rent upfront before you sign a lease. Never hand over any money until you’ve been given a copy of the signed lease, especially if you haven’t physically inspected the property first. If you do hand over your money first, don’t expect to ever get it back. 

3. A deal seems too good to be true

When an offer seems too good to be true, it probably is. Listings that are below the going market rate may seem appealing and if you’re desperate it’s easy to overlook the risks. For example, if the asking rent doesn’t add up to the unit size or amenities, it’s a sign that something isn’t right. Scammers will use a low-rent price as bait to make it  impossible for renters to resist a deal.  

4. The listing appears unprofessional

Does the ad have spelling or grammatical errors? Does it contain fuzzy images or multiple watermarks? If so, it’s a good indicator that a scammer has probably stolen the photos from other rentals currently on the market and should not be trusted.

5. An exact address is not available

If you can’t locate exactly where a property is, you can’t verify that a listing is legitimate. If a listing is vague or if other information like the neighborhood or nearby landmarks is also missing, trust your instincts and move on. 

6. The process is rushed

If you notice that the landlord or agent is using pushy sales tactics or wants you to submit payment without running a background check, it’s a dead giveaway that they’re a scammer. Real landlords want reliable tenants and will therefore make you go through a complete tenant screening process. On the other hand, someone who wants a one-time payment from you will create a sense of urgency so they can get their money as fast as possible.  

Tips to avoid rental fraud

It’s important to take these steps when evaluating if a rental listing is legitimate or not. Doing your due diligence today will ensure you aren’t falling for rental scams and give you peace of mind for the long run. 

Research extensively

When you search for a listing, be sure to crosscheck multiple trustworthy listing services and rental apps. For extra peace of mind, look up the agency on the Better Business Bureau’s (BBB) website and take the time to verify the landlord’s background. 

Check the property’s street views

Confirm the authenticity of a rental listing by cross-referencing the exterior photos featured in the listing with the images available on an online map. If these pictures don’t match up, you may want to physically visit the site to verify the address or consider looking for another property. 

Look for online reviews or testimonials from previous renters

Genuine reviews provide valuable insights into the experiences of others who have rented the property. Reviews also shed light on the credibility of the landlord, the condition of the property, and the overall leasing process. If you can’t find reviews online, don’t immediately assume that a property doesn’t exist or a landlord isn’t trustworthy. Instead, proceed with caution and consider requesting references from the landlord or arranging a meeting to discuss any concerns before signing a lease. 

Steer clear of cash or wire transfer requests

Never rush into payments and always opt for traceable transactions with a receipt. You can use secure payment methods that offer dispute resolution mechanisms like credit or debit cards, or payment platforms with fraud protection features.

Protect your personal information

Only provide personal details when you're sure that a listing and the landlord is legitimate. Also be aware of online forms and don’t enter sensitive information into unsecured websites since they’re susceptible to data breaches.  

Communicate directly

Contact the landlord or rental agent directly using verified contact information. Be wary of a landlord who solely communicates through email or messaging apps. If they’re avoiding face-to-face interactions, suggest speaking to them over a video call so you can verify their identity. 

How to take action if you’re a victim of an apartment scam

As scams become more sophisticated, they are becoming increasingly challenging to detect. By reporting that you’ve been scammed you can help raise awareness of the issue and potentially protect others from being targeted too. 

File a report

Report the scam to the Federal Trade Commission (FTC) and contact local law enforcement if you have information leading to a potential arrest.. If you’re a victim of identity theft or need to dispute fraudulent charges, file a report on IdentityTheft.gov as well. 

Have the listing permanently removed

Separate from filing a report, notify the FTC and the FBI's Internet Crime Complaint Center (IC3) about the fraudulent listing. You’ll also want to contact the site where the listing was posted to have it permanently removed so others won’t fall for the same scam. 

Freeze your credit

This can be done to prevent a scammer from opening a line of credit using your credentials. To initiate a credit freeze, simply contact each of the major credit bureaus—Equifax, Experian, and TransUnion. 

Monitor your credit frequently

Once you unfreeze your credit, be extra vigilant about checking it regularly. Keep a close eye on your accounts so you can identify any unauthorized activities or suspicious transactions. Experts recommend checking your credit at least once a year and more often if you've experienced identity theft, encountered fraudulent charges on a credit card, or had your personal information compromised in a data breach. Set up alerts through your financial institution or credit monitoring services to receive real-time notifications of any changes. If changes do appear, you can take immediate action in the event of any unusual or potentially fraudulent behavior. 

Reverse payments 

Contact the fraud department of the respective app or financial institution you used to let them know about any money you lost to the scammer. Financial institutions often have established protocols and procedures to investigate and reverse unauthorized transactions but you’ll need to provide them with detailed information about the transactions including dates, amounts, and any relevant communications with the scammer. 

Consider extra digital security

So far in 2023, the FTC has received 5.7 million reports of fraud and identity. With alarming statistics like these, the market for protection services is expected to reach $28 billion by 2029. To protect your personal information and for an extra layer of security to safeguard yourself from being scammed, sign up for identity theft protection services so it never happens again.  

RentSpree: A powerful ally in avoiding rental property scams

Once an applicant has done their due diligence to find authentic, trustworthy listings, the next step is to use a rental application platform to complete the process. But not just any platform will do; applicants need to choose one that not only safeguards their Personally Identifiable Information (PII), but also enables landlords to make well-informed decisions about potential tenants based on reliable tenant screening criteria. 

With its comprehensive tenant screening services, RentSpree provides applicants with a safe and secure experience, ensuring they are protected throughout every step of their rental journey. RentSpree also gives landlords an array of tools and resources that help them seamlessly navigate the rental process. 

Set up an account today.

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