Think Out Loud

Self-guided tours, affordable housing shortage drive increase in rental scams

By Gemma DiCarlo (OPB)
Aug. 6, 2024 1 p.m.

Broadcast: Tuesday, Aug. 6

00:00
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14:21

According to the FBI’s Internet Crimes Complaint Center, Americans lost more than $145 million to real estate scams last year. One component of those is rental scams, where legitimate listings are pulled from property management websites and reposted to sites like Craigslist and Facebook Marketplace for a lower price. Prospective tenants are sometimes even able to tour a unit before signing a bogus lease and paying a security deposit and fees to the scammer.

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Rental scams have been on the rise in recent years, thanks in part to the popularity of self-guided and remote tours in the wake of the COVID-19 pandemic. The nationwide shortage of affordable housing has also pushed many renters to move quickly on listings that promise a good deal — making them a prime target for scams.

Alexis Weisend covers affordable housing and homelessness for The Columbian. She recently wrote about this trend in Southwest Washington and joins us with more details.


The following transcript was created by a computer and edited by a volunteer:

Dave Miller: This is Think Out Loud on OPB. I’m Dave Miller. We end today with rental scams. These are financial crimes where a legitimate apartment listing is reposted to a site like Craigslist or Facebook Marketplace at a lower price. A prospective tenant is then lured to pay application fees to the scammer or even sign a bogus lease and pay thousands of dollars in a fake security deposit. These rental scams appear to be on the rise. Alexis Weisend covers affordable housing and homelessness for The Colombian.

She recently wrote about this trend in Southwest Washington and she joins us with more details. Alexis, welcome back.

Alexis Weisend: Yeah, thanks for having me.

Miller: You interviewed a woman who recently fell victim to one of these scams. Can you tell us her story?

Weisend: Yeah, this woman said she was fleeing domestic violence with her two children. She was living in a safe house for survivors of domestic violence and she was told that she had to leave relatively soon. So this woman, she’s a single mother, she isn’t working right now. She lives off of benefits and so she needed some very affordable housing. We don’t have a lot of that in Clark County.

And so she went on Craigslist and tried to find some herself and she came across a $995 apartment in Vancouver that seemed like it would work.  She contacted the number at the bottom of the screen and spoke to a man who said he was the landlord of the apartment. She refused to pay him any money because she knows that scams like these – it seemed a little too affordable to be true. And so, she thought, if she insisted on taking a tour, that might be a way to avoid a scam.

And he said, “Oh, that’s no problem. I can give you a tour.” And so she had him on the phone, which is very common for landlords to do nowadays – to be on the phone if they’re in another state or something like that. She pulls up to the apartment and there’s a lock box on the door. She says, “Oh, I can’t get in, there’s a lock box.” And he said, “OK, I know the code.” So she types in the code and it pops open. She grabs the key and she takes a tour with him on the phone. He knows details about the apartment. It seemed like he had been there before.

So she said, this is perfect. It’s a little shabby, but that’s understandable for a $995 apartment. She says, “I’ll take it.” So she signs an eight page lease. She pays him $1,500 for fees and the security deposit, and she tries to move in a week later. The lockbox code is changed and she realizes that she’s been scammed. She has to go back to the shelter she’s staying at and start all over again – except with $1,500 less.

Miller: How is this case emblematic of the larger issue?

Weisend: Well, two things happened in the last five years, right? We had the pandemic and we had the affordable housing crisis get worse at the same time. So during the pandemic, a lot of interactions including those between tenants and landlords became remote. And like we discovered with a lot of remote work, it was just a lot more affordable to do that, right? You don’t need to hire someone to come along on the tour. You don’t need to have someone local for each of your places.

That made sense for a lot of, especially mom and pop landlords, who have rentals in different states who cannot make it on a flight to California – or Washington, in this case – to give one person a tour. But even larger companies like one called American Homes 4 Rent kept these remote interactions after the pandemic. You can actually tour their homes yourself by entering in your ID and passport. But that has not been enough to stop scammers. They took advantage of that model by probably entering in fake information and getting access to the house for 24 hours or so before the key code is changed. And so for those 24 hours, they act like it’s their rental.

They wait for someone to ask for a tour and then they enter in that self tour information and get the key code for 24 hours. So a lot of people have been scammed by those rentals. The second thing is, obviously, the affordable housing crisis happening at the same time, just getting worse and worse over the last five years. You have a lot of people competing for a small amount of affordable rentals pretty much everywhere in the country, especially in these metropolitan areas.

What these scammers do, according to a landlord that I talked to and in this woman’s situation, is rip off legitimate rental ads and then price them 30 to 40% lower. And then they pretend to be a landlord and give you a tour remotely. So basically, they’re targeting very desperate people.

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Miller: Do property management companies or owners themselves bear any legal responsibility, if the streamlined and cheaper systems that they’re using are so prone to fraud?

Weisend: It’s tough. I talked to a lawyer about that and he said there hasn’t been too much legal precedent, but he would imagine that if you have a model that invites fraud or you’re not doing enough to prevent fraud, that is negligence. And so we’ll see as these scans increase, whether there are any court cases that arise. Usually the court cases involving scams, according to this lawyer, are … some people actually move into these rentals. So if they move in quickly before the key code is changed by the actual owners, they can live there for a time without the legitimate owners realizing that someone is inside that house, and they can receive an eviction.

And so that’s when lawyers start to work with them to see if they can get that eviction off of the record because they thought they did everything right. They were paying money to somebody, not the actual landlord obviously, but now they have an eviction stain on their record which is going to make it harder to rent the next place.

Miller: Am I right that you heard that some of these scammers can pose both as the owners or management companies of these apartments and also even as eviction lawyers? So somebody who you could turn to once you realize you’ve been a victim of a scam?

Weisend: Yeah, I heard that from the lawyer that I talked to for this story. He works for the Housing Justice Project. He told me that there’s been this one guy who’s been a particular problem for the last five years. He uses the same name. He puts up these fraudulent listings and then also pretends to be an eviction lawyer. And so it’s really hard, as you can see from the same guy doing this over and over again, to catch these people until, obviously, it builds up to a big enough case where maybe the FBI would get involved.

Miller: You actually got in touch with the man who scammed the woman that you interviewed. Can you tell us about what that exchange was like?

Weisend: It was strange. I asked the woman who was scammed if I could have the phone number of the scammer and she said, you know, yeah, sure. He’s probably not gonna pick up. He has not reached back out to me, obviously. And so I call him, he doesn’t pick up, not surprising, and I leave a message saying that I’m interested in a listing, although I don’t specify which one. And about a minute later I get a call back from a New York number. And I pick up the phone and I say, “hi, is this Robert,” which is the name that he had given this woman, pretending to be the landlord. He kind of waits a second and he goes, “yes.”

And it was kind of funny. It was like he was trying to remember what name he had used  on which listing and just kind of went with it. And I told him I was interested in one of his listings and he thought that I was talking about a listing in California, which was really interesting. And without me asking for a tour, he asked if I’d be able to come over and view this California apartment within the next two hours. Which is really strange. Because for scams, you want to keep it as minimal as possible and move quickly. So it was really strange that he was offering a tour without me even demanding one. And so this is clearly part of his scheme of sorts. And I said, “yeah, I can do that.” He [said], “so I’ll speak to my assistant and get the key code.” So this is clearly the system that he uses for a lot of his scams.

I asked if he had anything in Washington specifically. I’m not really looking for a California apartment right now. He says, “No, I don’t, but I can ask a friend who owns some apartments in Washington. What’s your budget?” I tell him I’m really desperate for housing and I can only afford $1,200. He goes, “oh, that’s fine, but you’re gonna have to pay the security deposit and a lot of fees.” I think he said something like $2,500. And so this time I told him, I said, “Hey, I know this is a scam. I’m a reporter. I’m writing about rental scams like these. I’m wondering, do you want to say anything on your behalf?” And it’s kind of silent for a second and I’m waiting for him to hang up. He says, “well, what do you want to know?” I was really surprised to hear that. And I was like, “oh, well, how long have you been scamming?” And then he got smart and hung up.

Miller: One of the things that really stood out to me in your articles, you heard from experts that they gave some advice for how people can avoid getting caught up in these scams to begin with. One is to watch out for urgency, that urgency is a red flag. I mean, you could even hear it in the conversation you had, that brief conversation with a scammer. Another is to avoid paying for a security deposit or fees with apps like Cash App or Venmo.

But both of these potential red flags are things that they’re so common among renters right now. The urgency is there because it’s such a tight rental market. And my understanding is that some legitimate landlords accept payment or maybe even ask for payment using those apps. So where does that leave prospective tenants?

Weisend: It’s so much harder now than it was maybe five or 10 years ago to find scams and see them as red flags exactly because of that. When I told some of my friends about this story, they were like, that’s exactly how I got my apartment. I was on the phone with a landlord – these are friends in Portland – and I paid them through Venmo.

Miller: And just to be clear, those were legitimate transactions where your friends ended up talking to the person who actually legitimately owned the place or was managing it?

Weisend: Right. It’s super common, especially when you’re not working with a large rental agency to find a place on Craigslist or Facebook Marketplace, and work with someone who doesn’t own a whole lot of rentals, doesn’t have a super professional set up like a website and things like that. And you see all of these legitimate rentals, rental listings, and there are very good scams mixed in with them. Like you said, it’s such a tough rental market right now that the FBI agent is saying you can’t fall for these people that are pushing you to go quick, quick, quick. But when you have five, 10, 20 other people competing for the same housing, you do tend to move quickly to scoop up an apartment.

Miller: What did you hear about how the woman you interviewed [is] doing now?

Weisend: I asked her what update she wanted to give. I told her I was gonna be on the show and let her know. She said she just wants people to know that she’s surviving. She hasn’t found housing yet. But a lot of our readers made donations to her and she said that that’s been really helpful.

She was also super lucky. A lot of people don’t get their money back from these scams, especially when they pay through payment apps or wire transfers and things like that. But she happened to get her money back from Cash App and she contested it. Obviously, $1,500 is still not enough for an apartment. It costs thousands to move in and she’s not gonna find a $995 apartment again.

Miller: Alexis, thanks very much.

Weisend: Thank you.

Miller: Alexis Weisend covers affordable housing and homelessness for The Colombian. You can read her latest article about rental scams in the paper.

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