The three-bedroom home on Lexington Court in Largo, Fla., 20 miles north of St. Petersburg, looked like the perfect family home, with a nice front yard, central cooling and laminate floors. For 18 families, it turned it was too good to be true — and at a serious cost.
A married couple, Nicole and David Johnson, allegedly posed as the owners of the rental property, giving tours and collecting more than $25,000 from those families, local television news station WFTS reported in late June.
The home, it turned out, belonged to Nicole Johnson’s parents and was not available for rent. The Johnsons targeted the families using social media and by posting to Craigslist. Local police have called it the largest rental scam they’ve ever seen. Many of the victims only realized that the listing was a fraud when they showed up to the property on the same day and notified police.
Some of those families were moving to Florida from out of state, and many have had to resort to GoFundMecampaigns in an effort to recoup their losses, according to WFTS. The scammers are believed to have fled the state.
These 18 families are far from alone. As rents have shot up nationwide in recent years, millions of people have been lured by fraudulent listings promising affordable housing.
An estimated 43.1% of all renters have encountered a suspicious listing in their hunt for new housing, according to a survey conducted in June by real-estate website Apartment List. Over half of those people said they had reached out to the person behind the property listing before realizing it was a fake.
Apartment List conducted a national survey of more than 1,100 renters and local surveys of between 50 and 54 renters in the 30 largest metropolitan areas across the country.
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Rental scams can take many forms, the Apartment List report describes. In some cases, scammers will pose as a landlord for a real property that’s available in an attempt to get the would-be renter or buyer to hand over a deposit or some other payment such as a fee meant for a credit check. This commonly happens with vacant homes that are on the market.
Other scammers will lure renters with a listing that advertises one property and then will try to dupe them into paying a deposit or signing a lease for a different property in a bait-and-switch tactic.
Renters can also fall victim to schemes where they sign a lease for a property that’s meant to come with certain amenities such as laundry or air conditioning, only to find out that the features don’t exist.
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While the vast majority of people who encounter fraudulent rentals don’t end up losing any money to the scam, that’s not the case for all renters. More than 6% of renters, or roughly 5.2 million people, reported a financial loss due to a rental scam. Younger adults, who are already more likely to be rent-burdened, are more likely to lose money in a rental scam — nearly one in 10 renters under the age of 30 has lost money in such a scenario.
“Millennial renters are generally more tech-savvy than older generations, but despite being familiar with online rental searches, many lack the ability to recognize fraud,” Igor Popov and Sydney Bennet, the Apartment List report’s authors, wrote. “Young renters often move to new cities, for example, for a summer internship or post-grad job and, thus, may be forced to sign a lease sight unseen.”
Of those who did lose money because of these scams, the median loss was $400. But for nearly a third of rental scam victims, losses exceeded $1,000. And when the cost is that high it can have disastrous consequences for the victims.
How to avoid a rental scamThe Federal Trade Commission and Apartment List have some pointers for how consumers can avoid falling for a fraudulent rental.
Beware when the supposed landlord or broker asks for payments to be wired. The FTC called this “the surest sign of a scam.” A money wire is no different than sending cash—meaning there’s no way to get the funds back if the listing is indeed a scam. Don’t pay before signing a lease, meeting the broker or landlord advertising the property in person and touring the property in person. Renters who are looking to secure a property somewhere they don’t yet live should see if a friend or family member can meet the person who controls the listing rather than give away money sight unseen. Double-check that the property isn’t also listed under another broker or owner’s name. If so, it could very well be a fake ad. If dealing with someone who claims to be a property’s landlord, verify if they are being honest using city property records. Speak with current tenants to double-check the landlord’s identity and get any additional information about the property. Think twice before providing confidential information including Social Security numbers or bank account details. Ensure all supposed amenities and features are listed in the lease before signing. If all else fails, consider renting from a well-known, reputable property management company. Particularly for consumers who are in the difficult position of having to get an apartment or home sight unseen, finding a reliable property management firm that employs trusted real estate agents with set procedures can help avoid fraud. And remember: If the listing looks too good to be true—a beautiful apartment at a ridiculously low price—it probably is.
