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Protecting Yourself From Hard-to-Spot Rental Scams

Renting

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Finding a new place to live can be scary for so many reasons. From finding a new roommate to being smart about who you work with, renting a new home is a lot of work. But with scammers abound, how do you avoid being the next victim? First, you do your research. If you’re in Southern California, the Bureau Real Estate in California releases a yearly consumer alert detailing the latest fraud and how to avoid it. But before the BRE gets hold of the information, how can a renter (or property owner) sniff out a fraud and report it? Here’s a look at some common renter fraud crimes in SoCal and elsewhere, and some expert tips to stay ahead of the criminals.

The Two Most Common Rental Scams

You’ve been warned plenty about the notorious Craiglist scams, but some of the most common fraud crimes aren’t always so easy to spot. When renting, be on the lookout for scammers trying to commit:

Identity Theft

It’s standard practice for landlords and brokers to run credit checks before approving you for an apartment, but it means offering up highly private information that you don’t want ending up in the wrong hands. Identity theft is something renters aren’t always on high-alert for, says certified Identity Theft Risk Management Specialist and owner of Global Intelligence Consultants, Inc. Efrat Cohen, but they should be.

“When you apply for a rental, you’re giving up all your information and, in most cases, the authority to conduct a credit check,” she points out. “Identity theft is a huge issue in rental scams. Look out for people who claim to be long-distance landlords and request other personal or financial information.”

Internet Scams

A very common variety of rental scam, this one takes a bit of finesse to sniff out. In the majority of internet scams a property will be listed as “for rent,” but the person listed as a contact is not actually the owner or landlord of the property. There are several situations that can then ensue:

  1. The “landlord” will be unavailable, both in person and to open the property, but promises to mail keys to the potential renter once a deposit is wired to them. This is the easiest scam to spot. However, in this case the scammer is usually out of town, and difficult to track.
  2. The “landlord” will be available, show the property as though they own it, and can accept the deposit in-person, but either give no keys or give keys that don’t work.
  3. Finally, some scams are particularly difficult to spot because the “landlord” will be present, will show the property, accept the deposit, and give the new tenant keys that actually work on the locks.
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Pay attention to any red flags in the listing or in the lister’s behavior, and if anything looks off, ask about it. Scammers will often dodge questions or answer indirectly. Cohen offers more warning signs of scams below.

Recent Frauds in Major Cities

San Diego saw a rash of rental scams ago, wherein scammers would list empty homes for rent and ask prospective renters to wire them the deposit. Of course, they weren’t the true owners of the homes, and generally didn’t live anywhere near (often overseas, in this case), making it hard to track and prosecute. This particular fraud was carried out through Craigslist, and other free sites, and offered unbeatable rates on rent.

In 2011, the LAPD caught three people who were running a similar scam in Los Angeles. Hair stylist and single mom of three Tanzy Harris was one of many victims who forked over a hefty amount of money for the deposit of an apartment her new “landlords” didn’t actually own. Though she was given a key to the apartment, she realized the next day that it didn’t work. Authorities suspected Harris was one of two dozen victims of the scam.

“The suspects preyed on a lot of people who were looking for inexpensive apartments,” the investigators told CBS Los Angeles.

In an even more elaborate ruse, a pair of NYC scammers posted ads for an apartment that they had keys to, but did not own, and accepted deposits from people desperate for an apartment. Blogger Sarah Gates was the ninth victim of the scam artists, who had already made $20,000 from other innocent renters.

“When I tried following up with Kim and the ‘landlord’ to discuss the apartment, I realized both of their phones were turned off. They were unreachable. So I started doing some research — something I should have done from the beginning,” Gates writes in a blog on The Huffington Post.

“I learned there was no Michael Bryant. And Kim was not renting the apartment. The actual landlord did not grant anyone permission to put an ad on Craigslist and was not renting any of the apartments. In fact, she had changed the keys because someone had complained that they had been subjected to a sublease scam in the building.”

Warning Signs

Now that you’re fully aware (and maybe somewhat terrified) of the reality of rental scams, you should also know that there are plenty of tell-tale signs that scream scam. Cohen advises taking the following measures to be safe:

  1. Verify the landlord is real. Do not do business with people that claim to be out of town, live elsewhere, or cannot show you inside of the property. This is non-negotiable!
  2. Verify the landlord is trustworthy. “The renter is usually being interviewed, but the renter should also be proactive and ask the landlords to provide adequate information that is credible,” says Cohen. If you’re unsatisfied, contact local real estate agents, or the county record’s office and verify who owns the property.
  3. Do not wire money. “If a landlord requests that you wire funds through Western Union or MoneyGram, do not wire the funds to anyone you have not met personally or have trustworthy information from,” says Cohen. Ultimately, you should never doubt exactly to whom and where your money is going, and if you do, don’t send it. And when you do make any payments, always ask for a receipt.
  4. Don’t give personal information to scammers. “Never provide you bank account number or social security number to unknown sources,” says Cohen. If you can’t verify that the landlord is a real person, or you don’t find them trustworthy for whatever reason, don’t offer any personal information that could make you vulnerable to identity theft.
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What to Do if You’re Scammed

Now let’s say that you fear the worst — someone has made off with your personal information or money, and you can’t get hold of them. It’s time to take immediate action. Cohen recommends taking the following steps:

  1. Call the police. This is necessary in the case of identity theft as well as monetary theft. The police should be notified of any illegal activity. If there are other cases reported, your complaint will hopefully aid them in finding and prosecuting the criminal(s).
  2. Call your bank. “Your bank should be immediately notified that your information has been potentially compromised,” Cohen says. In some cases, the bank can be helpful in tracking down the fraudulent activity, and might even be able to refund your money depending on the branch.
  3. Contact the credit bureaus. Contact all three credit bureaus, and request a credit freeze. This will help stop any further fraudulent activity (in the case of identity theft), and prevent any further credit damage. After the initial report, Cohen recommends continuing to monitor your credit report monthly for unusual activity.

And the most important rule of all: Even if there are no definitive warnings that something is amiss, it’s never worth the risk if something doesn’t feel right. Listen to your gut, and protect yourself from rental scam!