In 2021, the FBI’s Internet Crime Complaint Center (IC3) received 11,578 real estate/rental crime reports, with victims losing $350.3 million, 64% more than the previous year. But the bureau doesn’t just detail rental ad scam numbers.
These cases are not always unique. A Southern California-based operation defrauded more than 130,000 potential tenants and buyers across the country out of more than $25 million from 2009 to 2016, according to the Department of Justice (DOJ). The ringleader was sentenced in 2019 to a seven-year prison term.
People who legitimately offer properties for rent can also become victims. In a July 12 alert, the Boston Division of the FBI noted that some rental scams begin with an interested party responding to a genuine ad and agreeing to send a deposit.
What follows is a classic fake check scam: the potential tenant sends a check for more than the amount of the deposit and demands a refund of the excess, or backs out of the agreement and demands a full refund. When the check turns out to be fake, the renter loses all the money they sent to the scammer.
Inflation, pandemic spread peak in cases
The FBI warning links a recent increase in rental and real estate scams to soaring housing prices.
“We have seen a significant increase in the amount of money lost by people desperate for a bargain,” Joseph R. Bonavolonta, special agent in charge of the bureau’s Boston office, said in a statement. “Scammers take advantage of tenants who must act quickly for fear of missing out, and this is costing consumers thousands of dollars and, in some cases, leaving them stranded.”
The COVID-19 pandemic also played a role, triggering an increase in rental scams reported to AARP’s Fraud Watch Network toll-free hotline, 877-908-3360. Some examples :
• A New York woman found a rental apartment in Los Angeles on Craigslist and asked a friend to check it out in person. But before the inspection, The New Yorker wired $2,000 in “rental fees” to a person who turned out to be a scam artist. The sad truth: the apartment—a ghost rental—didn’t exist.
• A Californian found a “fantastic” place on Craigslist. The person behind the listing demanded $500 via Zelle’s instant payment app and the potential tenant complied. After sending the money, she realized it was all a sham.
• A couple in Texas saw a rental sign for a home they liked and were asked to send a security deposit using Zelle, and did so; later they were asked for more money for “rental fees” – and only then did they smell a rip off.