Scammers Cost U.S. Renters Millions, New Data Says. Here’s How To Avoid It Happening To You
This article originally appeared on Forbes.com and was written by Aly J. Yale
Phantom rentals, fake landlords and bait-and-switch schemes are costing Americans millions. According to new data, a whopping 5.2 million U.S. renters have lost money due to rental scams.
And renters in Atlanta and D.C.? They’re the most vulnerable.
The Costs Of Rental Fraud
A new analysis from Apartment List shows that 43.1% of American renters have encountered or fallen victim to a rental scam.
These scams can come in many forms. In some cases, it’s a non-existent property listed at bargain-basement prices or the promise of a no-screening application process. In others, it’s trumped-up amenities or a fake landlord who’s hijacked an existing listing they don’t have the rights to.
Whatever the method, these ploys are costing U.S. renters big. Of the 5.2 million victims of the scams, one million lost more than $2,000. Another two million lost at least $500.
Atlanta renters have lost the most, with 9.5% of renters saying they’ve lost cash to scammers. Washington, D.C., Denver and Las Vegas all have similar stats, with about 9% of renters reporting losses to scams.
It appears younger renters are more at risk, too. According to ApartmentList, renters 18 to 29 are 42% more likely to experience rental fraud. To date, 9.1% of this cohort has lost money to a scam, compared to 6.4% of all renters.
According to Syndey Bennet, Apartment List’s senior research associate, it may be Millennials’ mobility—or their financial limits—to blame.
“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,” Bennet said. “Additionally, fraudulent listings tend to advertise rentals at a below-market rate, so renters with a tighter budget or less familiarity with the local market are more likely to believe scam listings are real.”
How to Avoid Rental Scams
Want to avoid losing cash on rental scams yourself? Here’s how the experts say to do it:
Watch for deals that look too good to be true.
“Scammers will often list properties at below-market value in order to attract more interest from renters. For perspective, take a look at median rents in your city. If you find an apartment at prices much lower than comparable rentals in the same neighborhood, the listing is more likely to be a scam. If you pursue the rental, make sure to visit the property before sending any payments.” — Bennet
Make sure you can find the property in more than one place.
“If the listing cannot be found on multiple listing platforms, it is probably fake.” — Brett Compton, Warburg Realty
Look for duplicate listings.
“Look out for the same apartment number being listed more than once. Sometimes, within one building, you'll see different agents listing the same apartment. Look out for apartment numbers that look similar like 1A or A1. Not always, but sometimes, when more than one agent is listing the same apartment, it means it is an exclusive listing of neither of them.” — Maggie Fanney, Triplemint Real Estate
Ask about other offers.
“A lot of my clients have told me that, before working with me, they found an apartment that they ended up falling in love with and applying for. The listing agent only disclosed that there was another application approved after my clients’ application fee was collected and forfeited.” — Omer Sultan, Triplemint Real Estate
Learn to spot a fake.
“If a listing lacks an address or photos, it is more likely to be fake. If an address and exterior pictures are provided, you can verify the rental using Google Street View. Another step that you can take to avoid fraud is to search the address for listings on other sites. If you find listings for the same rental on various sites, make sure the contact information and listings details are the same as the listing you’ve seen." — Bennet
Be wary of higher-than-normal deposits—and don’t use cash.
“Scam artists generally ask for payments in cash or via wire transfer because this form of payment is impossible to track. When possible, use a credit card, or if that’s not possible a check.”— Bennet
Steer clear of Craigslist (and a few others).
“Craiglist used to be a pretty useful platform to search for an apartment back in the day, but now it’s filled to the brim with bait-and-switches and false advertisements. So is RentHop and Naked Apartments. The only real trustworthy site to use is StreetEasy, because it costs agents money to use.” — Sultan
Avoid listings that advertise a “no-screening” process.
“In order to attract renters with limited options—for example, those with poor credit or a criminal record—scammers will advertise apartments with no screening process. Be wary of rentals with no background and credit check requirement and make sure to verify the property is legitimate before paying a deposit.” — Bennet
Use an agent.
“I’d say the best solution to these problems is to work with an agent you trust wholeheartedly. They’ll be able to confirm actual availability and prevent you from wasting your time on bait-and-switches and forfeiting your hard-earned money.” —Sultan
Photo credit: Reed Saxon