Dec. 10, 2019 - Louisville, Ky. - The place seems like a dream come true: the right space, the right location, the right price. But is it really for rent? Or will the renter or traveler arrive to find their money gone with nowhere to stay?
An in-depth investigative study by Better Business Bureau (BBB) finds that fraud is widespread in the online rental home and vacation rental market, with 43% of online shoppers encountering a fake listing and more than 5 million consumers losing money to such scams.
The investigative study -- Is That Rental Listing Real? A BBB Study of Rental Scams Involving Apartments, Houses and Vacation Properties -- notes that 85% of consumers encountering fake rental listings do not fall for them. However, these figures suggest that the volume of rental scams lurking on the internet is staggering. Read the full study here.
According to the study, rental scams can take several forms, but perhaps most commonly, fraudsters simply copy the photo and description of a property, post it online with their own contact information and try to get a deposit and first month’s rent from the victim. The fraudster may communicate only by email or text message and may claim to be out of the country and unavailable to show the property. Once the victim sends money, the fraudster disappears.
In less common types of fraud, victims may be enticed to buy an online directory of homes supposedly for rent, or they may be tricked into signing up for credit monitoring that comes with recurring monthly charges.
“While an advertised rental that meets your needs at a great price might be tempting, it just may be a scam,” says Reanna Smith-Hamblin, President/CEO of BBB serving Louisville, Southern Indiana, and Western Kentucky. “Consumers shouldn’t rush into paying upfront fees for renting housing sight-unseen. Instead, take time to verify the details of listings.”
BBB Scam Tracker has received more than 1,300 reports of rental fraud from 2016 to 2019, while the FBI’s Internet Crime Complaint Center (IC3) reports more than $37 million from January 1, 2019, through October 20, 2019, in losses associated with complaints that mention the word “rent.”
Many consumers look for rental listings on free classified listing sites like Craigslist in the U.S. and Kijiji in Canada, as well as Facebook Marketplace. They also check websites such as Apartments.com, Zillow, Trulia, Realtor.com and Homes.com. Fake listings turn up frequently on these sites, despite the companies’ efforts to keep scam listings off their sites and warn consumers about potential fraud. The study finds that while the most fraud reports come from the largest metropolitan areas, no geographic area in North America appears to be safe from it.
A Louisville consumer reported this scam to BBB Scam Tracker. He told BBB he contacted the “owner” of a property he found online. She told him the property was self-viewing, but he had to send a deposit first before she would give him the code to get into the house. Before he sent any money, the consumer found out someone else was the real owner.
Scams also frequently appear on vacation rental websites such as Airbnb, VRBO and HomeAway.com. They follow the same pattern, preying on vacationers’ inability to check out a listing before paying money for it. Cases also have been noted of scammers luring a renter away from Airbnb to deal with the “landlord” directly or spoofing Airbnb’s site to impersonate the landlord and the company’s payment portal. These companies likewise have warned consumers about potential fraud and taken steps against fake listings.
Rental fraud often is committed by Nigerian criminal gangs that participate in other types of fraud. Law enforcement efforts have targeted perpetrators of a variety of rental fraud. The Federal Trade Commission (FTC) took action against a company that fraudulently sold credit monitoring that allegedly was required before a consumer could tour a rental property, while another company selling a fake directory of “pre-foreclosure” homes was successfully prosecuted in federal court.
In addition to warning consumers of red flags that may signal apartment or vacation rental scams, the report recommends:
Rental unit owners should watermark photos used for rental postings, which will make it more difficult for scammers to copy photos of other properties posted online.
Website platforms that list houses, apartments and vacation properties should make extra effort to screen for bogus listings, and they should explore ways to allow consumers to easily report scam listings.
Police should encourage victims to report not only to the rental platform, but also to the FTC, BBB, or IC3.
What to do if you are the victim of a rental scam:
File a report with local police.
Go to BBB.org to view a business’ BBB Business Profile, including complaints and reviews, or to file a complaint or report a scam on Scam Tracker.
Contact the Federal Trade Commission at ftc.gov/complaint or by calling 877-FTC-HELP.
File a complaint with the Internet Crime Complaint Center.
About BBB
BBB is a nonprofit, business-supported organization that sets and upholds high standards for fair and honest business behavior. BBB services to consumers are free of charge. BBB provides objective advice, BBB Business Profiles on more than 5.3 million companies, 11,000 charity reviews, dispute resolution services, alerts and educational information on topics affecting marketplace trust. Visit bbb.org for more information.
Mindy Eaton
Director of Communications and Marketing
BBB serving Louisville, Southern Indiana, and Western Kentucky
844 South 4th Street
Louisville, KY 40203
Direct: (502) 588-0049
Fax: (502) 588-0080
bbb.org