A local agent recently found herself handling the fallout from an online rental scam, and we thought we’d share the story and some tips so you and your clients can be better prepared to spot, avoid, or deal with possible scams in the future.

Let’s set the scene: In December 2011, a local agent closed the sale on a property she had listed. In early January 2012, the agent began receiving calls from people inquiring about a rental property of hers they had found online. Upon investigating, the agent discovered that the “rental property” was actually her sold listing from December 2011, which was most definitely not for rent. Unfortunately, the agent soon discovered that the clients who had purchased the home were also receiving phone calls and visits from people wanting to rent the home.

Photo by Simon Howden

It turns out that somewhere along the way a scammer had captured some of the images and information from the online listing. That material was then used to create a Postlet showcasing the large house with many amenities for an extremely low and unrealistic rental price. The scammer even went so far as to include the original brokerage’s name as the brokerage for the listing, purportedly to give the listing increased credence. Unlike many scams of this type, the phone number listed did not work, so interested parties did some research and consequently began contacting the aforementioned agent and the new owners. Those callers were fortunate: if the number had worked, the scammer most likely at some point would have tried to obtain money or bank account information from the caller.

Online rental scams are unfortunately becoming increasingly common as the world grows more reliant on digital communication, so it’s up to agents, brokers, and consumers to educate themselves on known scams and how to recognize a suspicious listing. According to the Federal Trade Commission (FTC), there are a few key indicators that raise a red flag on a possible scam:

• They want you to wire money. Wiring money is the same as handing someone cash; there’s no way to get it back once it disappears. Thus it’s the preferred method of down payment by scammers.
• They want a security deposit or first month’s rent before you’ve met or signed a lease. A way for out-of-towners (who sometimes do have to rent a place sight unseen) to double-check the legitimacy of a listing is to do an internet search on the landlord and the listing. If the same ad comes up under a different name, be suspicious.
• They claim to be out of the country. Some of these will go so far as to have plans in place to get you the keys (which are usually fake) despite their supposed absence. A safe rule of thumb is to never send money overseas when renting a U.S. property.
• The rent listed is much lower than other similar properties in the area. The old rule of thumb applies: if something looks too good to be true, it probably is.

If you find that one of your properties has been the subject of a scam, the Better Business Bureau suggests following these procedures to handle it:

1. Depending on your location, file a police or sheriff’s report as soon as possible.
2. File a complaint with the FBI’s Internet Crime Center at www.ic3.gov.
3. If posted through Postlets, contact Zillow, who owns Postlets, immediately via Zillow’s customer service page at www.zillow.com. You can also flag the Postlet listing by going to the listing, opening the property details page, scrolling down to “Edit”, and selecting “Report problem with listing”. Also, be aware that Postlets populates many other websites, so do your due diligence to make sure the listing has been removed in all possible locations.
4. If posted on Craigslist, flag the post as Prohibited and then email abuse@craigslist.org.
5. Call the FTC hotline at 877-382-4357 and report the violation.
6. Post a sign on the door of the property explaining that the property is not for rent.
7. Double-check that all websites you may have created for the property are deleted.

Rental scams are an unfortunate part of today’s online real estate world. While they are often difficult to prosecute, rental scammers can be stopped, so be proactive: check Craigslist and Postlets periodically for unauthorized listings of your properties; educate yourself and your clients on how to recognize and deal with a scam; and take swift action if you see a potential scam.