Across the Northeast, a hot market has led to a large turnover of residential properties. It has also opened a new opportunity for criminals, according to law enforcement, and scammers are working overtime to take advantage of local residents caught up in the search.
As rents and home prices surge, the FBI is warning the public about the risk of rental scams and has put an emphasis on the need for buyers and renters to be cautious when posting and responding to rental properties and real estate transactions online.
“We have seen a significant increase in the amount of money being lost by people who are desperate for a good deal. Scammers are cashing in on renters who need to act quickly for fear of missing out, and it’s costing consumers thousands of dollars, and in some cases, leaving them stranded,” said Joseph R. Bonavolonta, special agent in charge of the FBI Boston Division. “We are asking everyone to exercise caution, especially over the next few months, as folks look to book last-minute summer getaways.”
In 2021, 11,578 people nationwide reported losing $350.33 million due to these types of scams, which is a 64% increase from the previous year. The FBI Boston Division, which covers all of Maine, Massachusetts, New Hampshire and Rhode Island, reported 415 victims in 2021 representing $13.42 million in losses, a 27% jump over the previous year.
In past years, many scams focused on receiving down payments for property from prospective buyers or renters. In those cases, the scammer duplicates postings from legitimate real estate websites and reposts these ads, after altering them.
“Often, the scammers use the broker's real name to create a fake email, which gives the fraud more legitimacy,” the FBI Boston Division said in a press release.
The latest scams also target possible landlords as well, however, and law enforcement officials said the rental scams occur when the victim has rental property advertised and is contacted by an interested party.
Once the rental price is agreed upon, the scammer forwards a check for the deposit on the rental property to the victim. The check is said to cover housing expenses and is either written in excess of the amount required with the scammer asking for the remainder to be remitted back, or the check is written for the correct amount, but the scammer backs out of the rental agreement and asks for a refund.
Since the banks do not usually place a hold on the funds, the victim has immediate access to them and believes the check has cleared. In the end, the check is found to be counterfeit and the victim is held responsible by the bank for all losses.
If you find yourself the target or victim of a rental scam, stop all contact immediately, and if money was sent, it is extremely important to report any transfer of funds to your financial institution and file a complaint with the FBI’s Internet Crime Complaint Center at ic3.gov.
The FBI also provides the following tips on how to avoid being victimized:
- Do not wire funds to people you do not know.
- Do not put money toward a house or apartment you have not seen.
- Confirm the identity of the landlord by researching public records to find out who owns the property you are seeking to rent or purchase.
- Do not fill out applications online until you have met directly with the property manager.
- Know local rental prices.
- Look for online reviews, references and testimonials from past inhabitants.
- Be wary if a potential tenant wants to rent property sight unseen.
- Be wary if a potential renter says they are out of town and will send you a cashier's check.
- Be wary if a potential landlord says he is out of the country and wants the rent sent to a foreign account.
- Do not accept overpayment for properties. If you receive a check for more than the specified amount, return it. Do not deposit it.