6 Ways to Avoid Being the Victim of a Rental Scam
Could the rental unit you or the student in your life found be too good to be true? There are some tell-tale signs to watch out for.
Most scammers will create fraudulent classified ads for available rental units in areas that are in high demand with a sweet asking price to generate the most interest. Once a person has inquired about the listing, the scammers will send out a rental questionnaire requesting personal information such as contact information, mailing address, occupation and income.
Often the property owner will tell you that they are working out of the country, but are keeping their home as an investment property. They will sell you convincing stories about how their family still lives in the area, and that they’re planning to move back in the next five years to retire there, start a family…etc. Because they are out of the country, they will tell you that you can get access to the unit by having the keys mailed to you…the only catch is that they require a deposit prior to you viewing the listing. They will send you a fake office address where you can send the funds, and then the keys are never sent.
It is so important to do your research and view a listing prior to making any financial decisions.
Follow these six tips to avoid being the victim of a rental unit scam.
1. Always schedule a showing and view the property.
2. Don’t give a deposit until you view the unit.
3. Bring someone to your showing.
4. Trust your gut.
5. Watch for photo quality.
6. Enlist the help of a Realtor®.
Following your initial conversations with the landlord/homeowner, be sure to schedule a showing and view the property before making any decisions or signing an agreement.
If anyone tries to convince you to provide a deposit prior to viewing the property, it is very likely that you’re dealing with a scammer. Visit the Landlord and Tenant Board for a full list of the rights that you have as a tenant, and the expectations that you should have of your landlord. Providing a hefty payment prior to viewing the listing won’t be one of them.
It is always best to have someone with you when meeting a stranger for a showing. If you get a bad gut feeling about the situation, there will be someone with you to help get you out of there.
If the listing price seems too good to be true, it likely is. Always be sure to do your research, comparing the average listing prices with the quality of the listings that you’re viewing online. For example, if you’re viewing a two-bedroom waterfront condo valued at $2,400/month in downtown Barrie, the likelihood of it being a scam is low, as the prices are comparable to others on the market, however, if that same listing is listed at $1,000/month, you might begin to wonder if the listing is legitimate.
Padmapper is a great tool to view the average rental prices in high-demand Canadian cities. In April 2019, the top three cities with the highest average prices for a one-bedroom rental include Toronto at $2,250, Vancouver, BC at $2,130/month, and Burnaby, BC at $1,570 per month.
Follow PadMapper’s blog for monthly statistics on Canadian Rental prices.
Many post their listings on external websites such as Craigslist and Kijiji. If the property is marketed by a brokerage, all trusted Realtors® will provide contact information for the listing agent, brokerage information, and a link to their website on the listing. If the photos posted for the listing look professional, but do not have the credibility of a real estate brokerage, it is very likely that they’ve been pulled from a brokerage’s website. Most rental photos are taken by the homeowner/landlord with a cell phone and don’t look staged unless listed on a brokerage’s website.
Contrary to popular belief, some brokerages do list rental properties. When you list a rental through a brokerage, they screen potential renters, check their credit rating, and ensure that both parties are fairly accommodated. The Realtor® will assist both parties with any inquiries that they might have during the process, as well as provide the potential tenant with a rental agreement, a contract that would protect both parties from any damages.
What to do if you’re the victim of a scam
Step 1: Gather all the information about the fraud. This includes documents, receipts, copies of emails and/or text messages.
Step 2: Report the incident to your local law enforcement. This ensures that police in your jurisdiction are aware of what scams are targeting their residents and businesses. Keep a log of all your calls and record all file or occurrence numbers.
Step 3: Contact the Canadian Anti-Fraud Centre (CAFC) toll-free at 1-888-495-8501, or through the Fraud Reporting System (FRS).
Step 4: Report the incident to the financial institution where the money was sent (e.g., money service business such as Western Union or MoneyGram, bank, credit union, credit card company, or internet payment service provider).
Step 5: If the fraud took place online through Facebook, eBay, an online classified ad service such as Kijiji, be sure to report the incident directly to the website. These details can be found under “report abuse” or “report an ad.”
How to protect yourself…and others
Step 1. Beware of Recovery Scams. Victims of fraud are often targeted a second or third time with the promise of recovering money previously lost. Always do your due diligence and never send money to recover money.
Step 2. Stay current. Advise the CAFC, financial institutions and law enforcement of any updates.
Step 3. Be pro-active. Educate family, friends, neighbours and co-workers en-masse marketing frauds. You may prevent someone else from becoming a victim.