Special Report: Online housing rental scams

Susan Caver has taught in the Baldwin County School system for a long time.  She’s seen a lot in the classroom over the years.

Little did she know, she was about to learn a new lesson.  It all started when her house sold faster than expected.  She and her husband needed a temporary place until their new home was built.

“My son called and said mom go look on hotpads.com. I think there’s a house that just might be perfect for you,” Caver said.

She found the perfect rental house on Hotpads.com.  It looked fine, the location was ideal, and the $600 to rent was a steal.

The supposed landlord wanted an application, a $600 deposit, plus first month’s rent.  Then the couple could have the keys.

“Whoever it was began to tell me that their husband was a medical doctor in Longwood, Florida and that they would be there for about three years,” Caver explained.  “They were really searching for someone who would just rent the house and take care of it like it was their own.”

But the house isn’t for rent, and the real owners don’t live in Florida.  They live in Baldwin County and told Fox10News the house is up for sale.  The couple of the home being used in the scheme did not want to be identified.  But the two said over the phone, they had no idea about the scheme and were floored when their realtor informed them.

How does the scheme work?

The criminals search websites that list homes for sale. They take the information in those ads—lock, stock, and barrel—and post it, with their own e-mail address, in an ad on Craigslist (without Craigslist’s consent or knowledge) under the housing rentals category. To sweeten the pot, the houses are almost always listed with below-market rental rates.

An interested party will contact the “homeowner” via e-mail, who usually explains that he or she had to leave the U.S. quickly because of some missionary or contract work in Africa. Victims are usually instructed to send money overseas—enough to cover the first and last month’s rent—via a wire transfer service (because the crooks know it can’t be traced once it gets picked up on the other end).   Renters might sometimes be asked to fill out credit applications asking for personal information like credit history, social security numbers, and work history. The would-be crooks can then use this info to steal even more money from their victims.

Fox10News went to the Baldwin County Realtor Association to see if they knew what was happening.  We talked to the vice president, Martha Taylor.

“It’s always a home that should be renting for at least $1500 a month and it’s showing up at $800 a month.”

Taylor told us these housing rental schemes are a real problem in Baldwin County.  And it’s not just bad news for people looking to rent.  As a result, many shocked homeowners receive knocks at their doors from people who were planning to move into their new rental home.

“We had a company that put a new listing in Spanish Fort and it appeared on Trulia as a rental…a very low price rental and unfortunately the house is occupied and people are showing up,” said Martha Taylor, Vice President Baldwin County Realtors.

She said real estate agents flag the bogus ads and try to get them taken down.  But it’s a very time consuming and frustrating process.

First agents have to find the various dot-coms where the fake ads are listed.  Then they have to contact the websites, which in many cases have no phone number.

But surely these individuals are being prosecuted right?  Unfortunately, local sheriff deputies say there haven’t been any local prosecutions, because the criminals are just too hard to track and most of them are outside the U.S.

“In some of these countries that are hosts of these, it’s not even a crime in their country to do what they’re doing.  So there’s very little we can do,” explained Huey “Hoss” Mack, Baldwin County Sherriff.

Sheriff Mack said it’s one of many growing pains in a growing county.  Baldwin County has seen a population increase of 30-percent over the last ten years.  With so many new projects, the county has become a bull’s-eye for paper crime.

“I think we’re going to see an increase, there’s no doubt about it,” added Sherriff Mack.

To keep up, law enforcement realizes some changes need to be made.

“A lot of the time an internet based crime is a faceless crime.  You are looking at it computer screen but you really don’t know what’s behind that computer screen, “Mack said.  “Law-enforcement is going to have to become better prepared to work crime from the desktop opposite our traditional role which has been out in the community and things of that nature.”

The sheriff says his investigators are being trained in computer forensics.

But when it comes to the internet you might be your best protection.  BBB advises renters of the following red flags to look out for:

• The deal sounds too good to be true. Scammers will often list a rental for a very low price to lure in victims. Find out how comparable listings are priced, and if the rental comes in suspiciously low, walk away.
• The landlord is located elsewhere and prefers to communicate via e-mail. Scammers might say they have just been relocated out of the country for a job or missionary work – don’t believe it.
• The landlord requires a substantial deposit before handing over the keys or even showing the home. Don’t pay any money before inspecting the home, inside and out.
• The landlord asks the renter to wire money through wire transfer services such as Western Union or MoneyGram. Money sent via wire transfer service is extremely difficult to retrieve and once the scammers have picked it up; there is little recourse—if any—for getting your money back.

It’s called being diligent…a lesson Susan can teach us all.

“Will I ever go to Hotpads.com or Craigslist? Not me.  I’m through with that kind of stuff.  I’m going to be more protective of myself online.”

We reached out to Hotpads.com to see what the company is doing in terms of these rental schemes.  The company issued the following statement:

HotPads goes to great lengths to police activity and fully inform our users of the existence of scams and how to protect themselves. In this case, we removed this listing on January 13th, the very same day it was posted.  We take these scams very seriously and we’re always analyzing and exploring new ways to stay ahead of this.

Here is more information about how HotPads prevents, polices and detects rental scams:

  • After entering a rental listing on HotPads, the user must submit a phone number and click on “call my phone”. The user will then receive a call or text with a 4-digit verification code. They must then enter the verification code to post the listing.
  • Our customer support team routinely polices activity on the sites in a number of different ways and if a rental listing is found to be fraudulent, it is immediately removed from HotPads. Additionally, any user who posts a fraudulent listing is blocked from posting additional listings, if possible.
  • Anytime a user contacts a property manager about a listing, they see a message to beware of fraudulent listings.
  • Every contact email sent to HotPads community members with a HotPads profile includes the following warning, and link to our Internet Fraud and Scam FAQ page: Beware of scams: HotPads does not review or screen messages sent to your profile. Please use caution in replying to people you don’t know personally. Learn more about potential e-mail scams.
  • In all of our site communications, we encourage anyone who comes across any suspicious use of the HotPads name or site activity to report it to fraud@zillow.com.

If you suspect a scheme, have already been victimized, or know someone who has fallen victim, you can also report it to the Internet Crime Complaint Center.


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