Apartment Hunting? Beware of Real Estate Rental Scams

In a recession crooks are finding new ways to separate you and your money.

October 3, 2008, 6:05 PM

May 18, 2009 — -- The Federal Trade Commission, the nation's consumer watchdog, is warning that people looking for apartments or houses to rent are the target of an obnoxious scam. The scammers advertise inexpensive -- but nonexistent -- places for rent and try to get people to send a deposit sight unseen.

As you can imagine, in this tight economy, low-priced rentals are in even more demand than usual, so the scam seems to be taking hold.

The crooks either take a real listing and tamper with it, changing the contact information, or they just make something up. Americans are highly mobile and cross-country moves are routine for us.

That means many people rely on Internet listings to search for their next home, sweet home.

It's a breeding ground for fraud. One step you can take to protect yourself is to do an online search of the property and see if it comes up under a different name. That may be a sign that a legitimate landlord's ad has been hijacked.

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If you are house hunting from afar, you must ask somebody in your destination town to go look at the place for you -- and not just the exterior either. Real landlords have keys so prospective renters can get inside and check the place out.

Try our Rent or Buy Calculator. Find out whether renting an apartment or buying a home is right for you.

Fake ones may try to get by with just a drive-by of some random property they have no connection to. In the most extreme cases, con artists drill the locks of empty houses that belong to other people, charge unsuspecting victims hefty deposits, let them move in -- and then disappear.

How to Avoid the Rental Scam

Here are some telltale signs of a rental scam, according to the FTC:

The crooks ask you to wire money. (Does anybody but crooks use wire transfers for money in this day and age? I wouldn't even know how to go about it.) Anyway, they want you to wire your security deposit, application fee and first and last month's rent -- whatever they can squeeze out of you.

Bear in mind that wiring money is like sending cash. There is no way to reverse the process.

They ask for money before you've seen the place or signed the lease. That's because, of course, there is no place to see and no lease to sign. They're trying to get your money before you find out.

If you can't see the place, meet the person or sign a lease before paying, run -- don't walk -- away from the deal.

The landlord claims to be out of the country. Actually, the scammers may very well be in another country. The Internet has made it possible for people all over the globe to prey on Americans.

They may say they will get you the keys through a lawyer or agent and even create fake keys. Don't buy it. Or rent it, rather. Never send money overseas for a rental unit.

If you suspect a rental scam, report it to law enforcement and the Federal Trade Commission at www.ftc.gov/complaint. Also contact the Web site where the ad was posted.

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