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January 28, 2016

Law Enforcement Cracking Down on Online Home Rental Scams

Rental Housing
Online fraud

Law enforcement started the year by cracking down on fraudsters using phony online real estate ads to fleece would-be renters.

In Florida, prosecutors recently filed charges against three West Palm Beach county residents for allegedly removing lockboxes from recently renovated homes, re-keying the locks and presenting renters who responded to their ads with fraudulent leases. The Sun Sentinel says the ads were placed on signs in high traffic areas.

The fraudsters are charged with taking over 80 homes, collecting thousands of dollars in rent and security deposits and causing HavenBrook Homes, the company undertaking the renovations, to sustain approximately $100,000 a month in lost rental income says the U.S. Attorney's Office for the Southern District of Florida.

Meanwhile, the Las Vegas Review-Journal reports that police are searching for an alleged fraudster for defrauding potential renters by listing properties under false pretenses on rental websites, like Craigslist. The scam follows a familiar formula of using other peoples' homes to illustrate on-line ads written to entice victims into sending security deposits and first month's rent sent via electronic transfer.

Renters can protect themselves from these types of scams by watching out for these red flags:

  • Requests that you wire funds, provide your credit card number, or use purchase money cards to pay for the security deposit and initial month's rent
  • Advertisers who will only communicate by text message or claim to be out of the country
  • Requests for personal information, including credit card or Social Security numbers

Prospective renters should also either check public records to verify the "landlord" advertising the property is the actual owner or ask for a copy of the property management company's management agreement/verification from the property owner. Renters can also google an address to see if the property is being advertised on services like realtor.com and trulia.com. If it is, renters should contact the real estate agent listing the property to confirm it truly is for rent.*

For more information on avoiding real estate scams visit My Home by Freddie MacSM.

* If you see an ad or a sign offering a HomeSteps property for rent, call 1-800-4FRAUD8

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