Rental fraud pervasive among home, vacation property listings

Rental fraud pervasive among home, vacation property listings

By Britta Clark

The place seems like a dream come true: the right space, the right location, the right price. But is it really for rent? Or will you arrive to find your money gone with nowhere to stay?

An in-depth investigative study by Better Business Bureau found that fraud is widespread in the online rental home and vacation rental market with 43 percent of online shoppers encountering a fake listing and more than five million consumers losing money to such scams.

The investigative study, “Is That Rental Listing Real? A BBB Study of Rental Scams Involving Apartments, Houses and Vacation Properties,” notes that 85 percent of consumers encountering fake rental listings do not fall for them. However, these figures suggest that the volume of rental scams lurking on the Internet is staggering. Read the full study here.

According to the study, rental scams can take several forms. But perhaps most commonly, fraudsters simply copy the photo and description of a property, post it online with their own contact information, and try to get a deposit and first month’s rent from the victim. The fraudster may communicate only by email or text message and may claim to be out of the country and unavailable to show the property. Once the victim sends money, the fraudster disappears.

One southern Utah woman was shocked to find her house and photos listed for rent online without her knowledge. The scammer running the listing was charging people for deposits, and sending potential buyers to the house.

“This website is having people send them money for a deposit on the home,” she said to BBB Serving Northern Nevada and Utah. “They are sending people to look at the property. We have people living in that house, and people just show up — walking right in the house to look at it — because the person from the website told them that they could.” She believes that the scammers got the photos from a listing she had previously put on Zillow. When she contacted the number from the fake listing, the man she spoke to claimed to own the house. Eventually, the website was taken down, but she has no idea how many people were scammed in the time it was running.

In less common types of fraud, victims may be enticed to buy an online directory of homes supposedly for rent, or they may be tricked into signing up for credit monitoring that comes with recurring monthly charges.

“While an advertised rental that meets your needs at a great price might be tempting, it just may be a scam,” says Jane Rupp, president and CEO of BBB Serving Northern Nevada and Utah. “Consumers shouldn’t rush into paying upfront fees for renting housing sight-unseen. Instead, take time to verify the details of the listings.”

BBB Scam Tracker has received more than 1,300 reports of rental fraud from 2016 to 2019 while the FBI’s Internet Crime Complaint Center (IC3) reports more than $37 million from Jan. 1–Oct. 20 in losses associated with complaints that mention the word “rent.”

Ryan Boswell of South Jordan inquired about an apartment online and was asked to send his driver’s license and wire money to a different state. Boswell sent his license but not the $670 they requested. He noticed that the ad seemed off when the supposed owner claimed to be living in Europe and backed out.

Many consumers like Boswell look for rental listings on free classified listing sites like Craigslist in the U.S. and Kijiji in Canada as well as Facebook Marketplace. They also check websites such as Apartments.com, Zillow, Trulia, Realtor.com, and Homes.com. Fake listings turn up frequently on these sites despite the companies’ efforts to keep scam listings off their sites and warn consumers about potential fraud. The study finds that while the most fraud reports come from the largest metropolitan areas, no geographic area in North America appears to be safe from it.

Scams also frequently appear on vacation rental websites such as Airbnb, VRBO, and HomeAway.com. They follow the same pattern: preying on vacationers’ inability to check out a listing before paying money for it. Cases also have been noted of scammers luring a renter away from Airbnb to deal with the “landlord” directly or spoofing Airbnb’s site to impersonate the landlord and the company’s payment portal. These companies likewise have warned consumers about potential fraud and taken steps against fake listings.

Rental fraud is often committed by Nigerian criminal gangs that participate in other types of fraud. Law enforcement efforts have targeted perpetrators of a variety of rental fraud. The Federal Trade Commission took action against a company that fraudulently sold credit monitoring that allegedly was required before a consumer could tour a rental property while another company selling a fake directory of “pre-foreclosure” homes was successfully prosecuted in federal court.

In addition to warning consumers of red flags that may signal apartment or vacation rental scams, the report recommends the following:

Here’s what to do if you are the victim of a rental scam:

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