The Investigators: Renters burned by scams in red-hot real estate market
MEMPHIS, Tenn. (WMC) - A quick search of rental homes in the Memphis area shows hundreds of properties are available.
But rental prices have gone up so much during the pandemic, competition to find the perfect, affordable home is fierce. And con artists are cashing in on that trend.
Finding a new place to live is stressful enough without having to worry that the rental sign in the front yard is fake.
”It’s something that we’re seeing more and more of,” said Daniel Irwin with the Better Business Bureau (BBB) of the Mid-South.
In this red-hot real estate market, renters are getting scorched by scam artists.
”Just because there’s a rent sign in front of a house, doesn’t mean the number that you’re calling owns the house or has anything to do with the house,” Irwin said.
Irwin says rental scams are skyrocketing.
Eleven local reports were made to the BBB’s Scam Tracker website in 2020. Victims are out more than $4,600.
So far in 2021, that number more than doubled to 26 reports. Victims were taken for more than $18,000.
Nationwide, renters were scammed out of nearly half a million dollars in 2020.
This year, it’s a staggering $5.4 million.
Irwin says this crime is vastly underreported out of embarrassment or shame.
”You know, there really is no shame to it. It doesn’t matter how smart you are, how educated you are, anybody and everybody can fall for a scam, he said.
Here’s how the most common rental scams work:
Phony ads are placed for rental properties that ask for up-front payments. But victims eventually discover the property never existed or it’s owned by someone who never had any intentions of renting.
“It’s just sad. People in Memphis are being taken advantage of because we never want to see that,” said Cassandra Bell-Warren, president of the Memphis Area Association of Realtors (MAAR).
MAAR represents 4,300 realtors - agents who have to be as cautious as renters.
Bell-Warren says scammers will hijack legitimate listings.
“I’ve had somebody call me and say, ‘I saw a house for rent for $700,’ and I’m like, rent? No, that house is for sale. Where did you see it? And then you go to Craigslist and there’s my listing,” Bell-Warren explained.
”One of the things you should watch out for is someone wants to rent you the house and they won’t show it to you. A lot of times, that’s something else that happens and that would be a big red flag,” Irwin explained.
Other red flags that can help you avoid becoming a scam victim include the following:
- Property ads have grammatical errors
- You’re asked to sign a lease before you see the property
- The owner or agent uses high-pressure tactics - urging you to rent quickly before someone else gets the property
- They ask you to use Cash App, Zelle, or to wire money overseas
“I should have known better...the rent was way too low for the neighborhood. I was afraid I would miss out. Now, I’ve lost $1,450,” said one victim on the BBB’s Scam Tracker website.
Another victim is out more than 1,200.
“The house I thought I was renting is occupied and the owner told me the address is being used in fraudulent listings. He’s being contacted by lots of people who fell for the scam,” the victim said.
This victim lost $3,700 on a fake Airbnb listing.
“Received instructions to use a prepaid gift card for payment of first-month rent and security deposit. Then no more contact. The website disappeared and the number was disconnected,” said the victim.
If you become a victim:
- File a report with your local police
- Contact the Federal Trade Commission
- And report it to the BBB’s Scam Tracker
Your report could save someone else from this insidious crime that leaves victims broke and homeless.
”You’re trying to build your home and then all of a sudden, you get kicked out and you don’t know where you’re going to go. You’ve spent all your money moving into this home It’s just especially devastating.” “You’re just devastated. Your entire world is just broken, right?” Irwin said.
“Do a little digging. If someone says give me $2,000 and you can move tomorrow, if it seems too good to be true, it’s probably not true,” Bell-Warren advised.
The BBB says if you’re not sure if a rental listing is legit, give their office a call and they’ll check it out for you.
It’s always better to be safe than sorry.
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