Effects of Rental Fraud

This article first appeared in the October 2018 issue of Pro Builder.

Phantoms, catfishing, hijacked ads, and bait and switch are just some of the deceptive rental scams that have been used to cheat a total of 5.2 million Americans while apartment hunting, according to rental listing site Apartment List. Defrauded renters are typically younger—between the ages of 18 and 29—and one-third have lost more than $1,000.

Apartment List surveyed more than 1,000 renters to gauge how fraud affects them and concluded that, of the renters who encountered scams, 88.3 percent have changed how they search for apartments going forward, including preferred search platforms, how and when they tour a rental unit, the types of buildings they look at, and their relationship with landlords.

Top of mind for previously scammed renters is “conducting additional research to ensure the legitimacy of a property,” accounting for a share of 36.7 percent of respondents, with renters who refuse to rent a unit sight unseen coming in a close second, at 35 percent.

According to the study, the five most common fraud schemes are: bait and switch, where the landlord tries to collect a deposit or have a lease signed for a property different from the one shown in the listing; phantom rentals, where the landlord lists a nonexistent or non-rental property; hijacked advertisements, where the listed property is legitimate but the contact information is altered; units missing amenities; and units that have already been rented.

When the scheme falls into the “missing amenities” category, the study found that heat or HVAC, and laundry are the most commonly lied about amenities, missing between 12.8 and 15 percent of the time, respectively.

Geographically, renters in San Francisco encounter the most rental scams, at 47.8 percent, with renters in Los Angeles close behind at 46.7 percent. Yet Dallas had the highest share of renters who lost money on rental scams (10.9 percent), followed by Atlanta (9.5 percent) and Washington, D.C. (9.3 percent).