There’s a thrill in the air when you’ve set your sights on a new rental, whether it’s in your current area or a completely different city. Unfortunately, that excitement can quickly turn to disappointment if you fall victim to a rental scam.
Rental scams often involve fraudulent listings, either for properties that aren’t actually for rent or ones that simply don’t exist, as warned by the Federal Trade Commission. Scammers typically demand payments upfront, such as an application fee, security deposit, or initial rent payment, and then vanish once the transaction is completed.
“After the money is handed over, the person claiming to be the landlord disappears,” explains John Breyault, vice president of public policy, telecommunications, and fraud at the National Consumers League, a consumer advocacy group.
### Victims Often Lose Money to These Scams
Rental scams are more common than one might think, according to experts. In 2023, the FBI’s Internet Crime Report noted 9,521 real estate fraud complaints, amounting to losses of over $145 million. Although these numbers have decreased from 2022, when 11,727 victims faced losses of more than $396 million, the problem persists.
Real estate fraud, as defined by the FBI, includes financial losses from deceptive real estate investments and rental or timeshare frauds. While online searching for a new home is convenient, experts caution prospective renters to be vigilant to avoid losing substantial sums.
Here’s a scenario: you find a listing asking for a month’s rent as a security deposit plus the first month’s rent upfront. Given that the median rent nationwide was $1,373 as of December, according to Apartment List, these amounts can quickly add up to significant losses.
According to a report by Rently, a rental automation service, 62% of those scammed lose more than $500, with 48% losing over $1,000, and 8% losing more than $5,000. This survey was based on 500 U.S. adults who have rented in the past five years and have either experienced or are aware of rental fraud.
If you’re planning to rent soon, here are key warning signs of a rental scam and what experts suggest you do to avoid them.
### Four Warning Signs to Look Out For
It’s common for scammers to create a high-pressure situation, urging you to make quick payments, says Breyault. To counter this, take your time with the rental search to reduce the urgency scammers count on.
These schemes thrive in competitive housing markets or after natural disasters when many people suddenly need housing. “Fraud often follows current events and disasters,” Breyault notes.
#### 1. Unsolicited Rental Messages
Tracy Kitten Goldberg from Javelin Strategy and Research warns that personal info like phone numbers and emails are easily available on the dark web. Receiving unsolicited rental offers is a red flag, especially if you haven’t reached out to anyone.
“Whether it’s a text or call from someone claiming to have an available unit, be cautious,” she advises.
Examine details like area codes or email addresses in unsolicited communications. If something looks off, such as a nonsensical email or a message from a suspicious domain, delete it immediately, according to Goldberg.
#### 2. Unconventional Payment Requests
Breyault points out that if a supposed landlord asks for payment via wire transfer, gift card, or cryptocurrency, that’s a major red flag. Instant payment apps like Apple Pay or Zelle should also be approached with caution.
“The thing these payment methods have in common is that once the money is sent, it’s nearly impossible to get back,” Breyault warns.
Federal laws often don’t cover these payment methods concerning fraudulent transactions. Therefore, halt the application immediately if you’re asked to use them.
#### 3. No In-Person Meeting
Goldberg stresses the importance of meeting prospective landlords or agents in person. Always try to see the property before signing any agreements.
If someone is hesitant to meet or show the property, consider it a warning sign, Breyault advises. If you’re not able to visit the property yourself, request a virtual tour or ask someone you trust to check it out for you. “That’s the best way to confirm if the listing is legitimate,” Breyault says.
#### 4. Too-Good-To-Be-True Prices
If a rental seems exceptionally cheap compared to similar properties, be skeptical. Such “bargains” often attract more potential victims, says Breyault.
Be sure to compare prices with other listings in your desired area and approach suspiciously low offers with caution. “Genuine deals exist, but so do scams,” Breyault cautions.
By staying alert and knowing the signs of these scams, you can protect yourself from falling prey to scammers and losing unnecessary money in your rental search.
