Tips on how renters and owners can spot and avoid the latest wave of rental scam con tricks: Internet Scambusters #393
Whether you're in the market to rent or looking to rent out your home, you could be locked in the sights of a rental scam trickster.
With more empty homes than ever -- thanks to recession-driven foreclosures -- rental scams are costing innocent victims a fortune, while landlords seeking tenants face a continuing onslaught of advance payment Nigerian scams.
We have the details, 12 suspicious signals to watch for, and some simple steps you can take to avoid getting snared.
And now for the main feature...
Empty Homes Open the Door to a Rental Scam
Rental scam artists are taking advantage of the flood of neglected, empty houses on the real estate market caused by the huge increase in recession-driven foreclosures.
Homes owned by banks and other financial institutions may take months or even years to sell, leaving them unchecked for the duration and sitting targets for the scammers.
In one recently reported case, an individual lived in and paid rent on a house for 15 months before discovering it was a rental scam and that the "landlord" didn't own the house.
Often, the crooks gain entry by breaking open lock boxes, and sometimes they even change the locks so the real owners or their representatives can't get in.
In addition, as we previously reported, rental scams for apartments advertised on the Internet are also on the rise -- with both owners and renters falling victim.
Scams targeting renters
Most commonly, the con artists merely copy listings of genuine house and apartment sales or rentals, re-advertising them with a different email address or phone number (usually a cell phone).
Or they tour neighborhoods and scour newspaper legal notices, to identify empty, foreclosed homes that they can commandeer.
If the scammers can break in, they'll happily show their victims around, posing as either the owner or an agent.
If not, they'll claim they're out of the country or make some other excuse as to why they can't show you the home.
But these con artists will send photos (also "lifted" from the original ads or realtor listings) and maybe even a set of fake keys in exchange for the rental payment -- thereby delaying victims' discovery that they've been scammed.
A particularly sneaky trick that targets would-be renters happens when the scammer actually does rent a home.
He then advertises it as being available, showing the place to prospective tenants while he lives there and collecting first and last month fees, and maybe an additional security deposit from each one, before skipping the scene.
Rental scams targeting owners
Many of the cases where owners are the rental scam victims bear all the signs of an advance payment Nigerian scam, tricking the victim into forwarding electronic cash to the crook.
In these cases, the scammer usually claims to be out of the country and may also tell a convincing tale suggesting the rent will be paid by a relative who owes them money, a corporate sponsor or an international charity or aid agency.
In each case, the owner receives a check for more than the rental cost, with a request that the balance should be forwarded to the "renter." The check bounces, of course, and the owner is out of pocket for the cash they wired.
12 Signs of a Rental Scam
Often, your instinct will let you know there's something not quite right about a proposed rental deal, but here are 12 tell-tale signs that suggest something's amiss:
General (typical of a Nigerian scam):
1. Communication is exclusively by email or cell phone.
2. The "owner" or "renter" claims to be out of the country.
3. Communication is urgent -- the person seems in a hurry to close the deal immediately.
4. Messages use poor spelling and grammar and, frequently, religious terms like "God Bless."
5. The house has a "For Sale" but not a "For Rent" sign.
6. The lock box is broken or the "agent" appears to have his own, different key to let you in.
7. The "owner" or "managing agent" is based out of town.
8. The home appears to contain someone else's personal belongings.
9. The rental sum is lower than the going rate for the locality.
10. The inquirer asks questions that are already answered in your flyer or ad (like when the place is available or what the rent will be).
11. The "renter" claims he's prepared to take the deal sight-unseen (usually a prelude to an advance fee scam).
12. The "renter" requests that you buy things or hire a contractor to do some work on the place first (usually the scammer is the "contractor").
Don't forget, too, that vacation rental scams provide another real estate route for the crooks to get into your wallet. You can read about them in one of our recent articles about holiday scams, How to Spot a Holiday Scam -- and Find Genuine Bargains.
Rental Scams: What You Can Do
Whether you're an owner or a renter, you can dramatically cut the risk of being scammed by taking just a few simple safety measures:
* Always seek and confirm the identity of the person you're dealing with. You want a confirmable name and address or even a notarized ID. For renters, you should be able to confirm ownership of the property on county registers.
* Check out average rental prices in the locality. Realtors and managing agents can help. Or visit a site like RentBits.com, which compiles rates for big metropolitan areas.
* Never rent or lease a home sight unseen. When you think of it, who would really agree to such a thing?
* Never wire money to someone you don't know, no matter how plausible their story, and never hand over cash for rent or deposit without confirming ownership (as discussed above) and without seeing, reading, and double-checking any lease agreement before signing.
* If you own but don't live in a home (whether it's for rent or not) keep a close, regular eye on it and, if you do rent it out, change the locks between tenancies.
* If you're renting, it may be preferable to work with a bona fide rental agency. Some owners do legitimately rent out privately, but just be more wary when dealing with them.
The Federal Trade Commission has also published one of its consumer alerts which provides further useful information.
It's bad enough that the slump in the real estate market has led not only to growing numbers of foreclosures, but also foreclosure scams. Don't allow crooks to make it even worse by falling for a rental scam too.
That's all we have for today, but we'll be back next week with another issue. See you then!