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Scams happen, and unfortunately, as time passes scammers are getting more adept at creating a believable story. Landlords and renters alike can fall prey to unscrupulous would-be tenants who merely seek to exploit the a trusting landlord.
Tenants with a criminal past or financial insecurities who are facing the need for housing may resort to deceiving a trusting landlord. While common lies from tenants (like hidden roommates or pets) can be damaging to property and landlord trust, the deeper deceptions scammers can employ can have a lasting financial impact and can harm the overall safety of residents.
Property managers and landlords alike, must protecting their portfolio, and their tenants by implementing strong tenant screening on all applicants. Regardless of the circumstances surrounding an applicant’s request, no situation is worthy of skipping this vital process. A handshake and a good story may mean a lot to you, but a would-be scammer will see it as an opportunity to circumvent criminal, credit and eviction reports--much to their glee.
Landlords and property managers are more likely to face an irresponsible tenant or intentional deceiver, but renters remain at risk to a potential scammer, as well. With upwards of 80% of renters using computer searches for their next rental home, rental listing sites like Craigslist, Zillow, Hotpads ect. have seen an increase in listings poised to take advantage of searchers trusting nature.
To fight against fraudulent listings, most rental listing sites rely on user reports and active monitoring to catch, remove and report scams. The anonymity of the internet has enticed greedy scammers to attempt to reach consumers regardless of the prevention tactics most listing sites employ.
Scammers will take advantage of the naive or desperate renter who seeks a space immediately or wants to take advantage of a too-good-to-be-true price. They do this by posting a vacancy on a listing site and asking for security deposits and first month’s rent--usually through wire-transfer--in exchange for keys. Once the scammer has secured that income, they will disappear, leaving the would-be renter without their funds or a place to live.
The ads that scammers place on a listing site can seem extremely believable, they tend to create ads that poses real or fake information and will include images or info using homes that have previously been listed for sale or rent. Any inquires will result in a template-like response email and include information suggesting the “landlord” or “owner” is out of town (or country) for a particular reason. The ad will typically include a long story explaining why the home is for rent, and the scammer will often avoid detailed questions regarding the rental. Moreover, the prospective renter will be told that they must rent sight-unseen due to a long-distance living situation on the “owner’s” behalf.
Renters on the search for a new rental home should always consider untraceable payment a huge red flag. Wire transfers are generally the prefered payment option for scammers since transfers through companies like Western Union or MoneyGram are untraceable and non-refundable. Scammers attempt to include specific details (like mentioning lawyers or agents and added security measures) to build trust with the victim.
Tenants can remain savvy by researching scammer’s techniques before searching for a rental. To learn exactly what to look out for by looking at this former real estate agent’s experience trying to catch a rental scammer in the act.
There have been cases of landlords that fall victims to online scams too. However, there are simple ways that landlords and property managers can serve to protect themselves as well as the industry as a whole.
Tenant screening is a must to protect yourself from scams and potentially dangerous criminals. However, even landlords that normally screen residents, will be tempted to bypass the normal process for what seem like extenuating circumstances. Always wait for a background check to return for your tenants to verify an applicant’s identity and reduce your potential risks. And always wait for a check to clear before refunding over-payment or handing over the keys.
A common scam that a landlord may face can occurs like this: A potential tenant would send a check for more than the original move in costs. This tenant would then asks for a refund of the extra money, and a trusting landlord may refund the money before the check clears. In the end, the landlord receives a bad check resulting in a negative balance.
To help protect the industry and potential future renters, report any listing that you come across that show signs of a scam. Adding visible watermarks or your business’s brand to any listing images can deter potential con artists from stealing your property’s photos in their fraudulent advertisements. When you list your properties, insure that the listing companies you are working with actively monitor their website’s content and remove any flagged content.
Ensuring you take the steps to prevent against scams will not only prevent your business from financial fallout, but will protect trusting renters within the industry. Sharing these tips with potential tenants can ensure that your would-be renters, don’t fall victim to a scammer.