Rental Scam

Created: prior to 2018

Recently, due to a couple of my kids going to University, I had the, lets call it, "opportunity" to find out about some Rental Scams. If you are planning on renting FROM someone, this page is a type of scam you want to avoid. If you are planning on renting TO someone ... then go to my Renter Scam pageHere for a scam that someone tried to pull on us. This page is designed simply to be educational in hopes that it will help people avoid being scammed by people trying to make money without providing a legitimate service.

We ran into 2 people who were apparently in the process of being scammed. The scam goes like this. The Scam artist finds a place that is for rent, say at $1000 per month. They proceed to put an ad on the internet or in a newspaper advertising the same place for say $500 per month - a real steal of a deal. And indeed, several people have been known to do this at the same time so that it eventually looks like the scam price is the "going" price for the area. Only when the tenant arrives and has no place to stay, and they have lost their deposit do they realize what happened. But there is a way to protect yourself...

They then tell you to go around and take a look at the place. You do. They then tell you "I live in <some location that is not near you>" - send me the 1st months deposit, and then I'll send you the key to the house/apartment. They will typically ask you to pay using Western Union or by Postal Money order or by some other method that allows them to pick up the money without having to have any "solid" ID.

You send them the money, the take it, and the scam ends there - from their perspective anyway. You never receive the key and you don't get the place to rent, but you lost the money you sent them.

Now. You might say - I'm only then going to go with prices that seem in the ballpark. While the ones I've heard of were a steal of a deal - a whole house for $400 where in fact, the individual rooms in that house were renting for far more than $400 and almost nothing in the area rented for only $400 - and you probably don't want the $400 ones unless you are a University student under a really tight budget - this doesn't mean that charging the correct price means they are legitimate. So use a low price as a clear signal that it is probably a fraud, but be aware and wary no matter what the price.

What should you do to protect yourself?

It seems to me that some of the ways to protect yourself are:

  • If they insist on you paying cash - make sure you have the key first and you have gotten into the room and they give you a receipt with their name on it. There still may be a scam that way, but much less likely if you have the key first. I would even go the extra step of having them show you picture ID to make sure they are who they say they are, look at it this way: If they are legit, they'll have the ID! If they are a scammer, they probably didn't go the extra step of having fake ID.
  • Before you hand any money over - go to the registry office - and check who actually owns the house. This will cost you about $10. Ask the person who is claiming that it is for rent - what is name of the owners on title, because I want to pull title before sending you the money. Then, make sure that you make the payment only to the people who are on title. So, the cheque is either written to the owner or you've verified with ID when you hand them the cash and get your receipt.
  • Be especially concerned about people who are out of country renting it to you. Make sure they have a bank in your country, and put the money (the 1st payment at least) directly into their bank account. I would even call the bank first, explain your concern, and see if they can give you anything that will make you trust that it is legitimate. Once you have determined they are legit, future monthly payments you can just give them a cheque. This means there is 1 in a 1000 people you won't be able to rent from, but so what, rent one of the other 999 units instead.
  • Be concerned if they don't ask for you to fill out an application with references - or at a bare minimum, ask you for a list of references. All legitimate landlords are going to ask you for this before renting a room to you. And ask your references whether the landlord called - if the landlord didn't call your references, they probably aren't legit, and, possibly more important, if they didn't call your references, they probably didn't call your roommates references - and do you really want to share with someone that the landlord didn't even bother to check out? Just took their money without caring if they were a good fit or legitimate. While you might save a few dollars on cheaper rent - is it really worth the long term risk? (Note, I am expressing my opinion as a father of 4 children - feel free to take a different level if you want!)
  • If more than one room is being rented - check with existing renters. This means of course going to the property physically, over the phone the scammer can have anyone pose as a renter.