Rental scam breaches lockbox security

Rental scam breaches lockbox security
Published: Mar. 15, 2016 at 2:19 PM CDT|Updated: Mar. 25, 2016 at 1:13 PM CDT
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MEMPHIS, TN (WMC) - An overseas scam artist found a way to breach lockboxes at rental properties to give the illusion that the properties belong to him.

Scott King, rental property manager of Reedy & Company Property Rental Property Management in Memphis, alerted the WMC Action News 5 Investigators to the scam after getting a call from Jessie Leigh McCulley. McCulley, a prospective renter, found a posting for a Bartlett, Tennessee, rental property on a third-party website. She called the number listed for the landlord. A man with a thick Middle Eastern accent who identified himself as 'Pastor Sias' answered. He told her he's renting the brand-new, four-bedroom, three-bathroom, 2,300 square-foot house for $800 a month.

That was red flag number one. The property actually belongs to Reedy & Company, with an official listing on its site of $1,775 a month.

While the WMC Action News 5 Investigators monitored the phone call, 'Pastor Sias' told McCulley he did not require proof of her income or a credit check. Red flag number two.

When McCulley asked him how he wanted to receive payment, he insisted on a Walmart wire transfer of the funds. Red flag number three.

McCulley played along, insisting that she had to tour the property. The scammer told her she's welcome to use the Rently self-service showing system lockbox on the property's mailbox. The system allows prospective renters to slide their credit or debit cards as collateral to get the key and tour the property. The system alerts the property management company to the card-holder and to the time of access. If something is stolen or damaged during the visit, the card-holder is billed for the loss.

"They're allowed to actually come and view the home at their own leisure and their own time," said King, who does not know how the scam artist could have known the property had a Rently lockbox.

The scammer told McCulley all he needed was her credit card number to help her access the lockbox, a blatant attempt to steal her credit card number. "I refused to do that, so he gave me (another card's) information," she said.

Trying to keep her on the hook, he actually gave her another card number -- expiration date, security code and all -- to open the property's Rently lockbox.
It gave the illusion that it really was the scammer's property, and it let her into the house. It wasn't until she noticed the Reedy & Company sign in the front yard that she realized the scammer was not the real landlord.

"Yes, I went inside," she said. "The fact that someone was getting me into a house that they don't own, I was worried that I would be getting into some type of trouble."

This rental lockbox scam is two-fold. One, the scammer asks for your credit card number under the premise of accessing the Rently lockbox. If a consumer hands over the card number, the scam is complete. Two: if the consumer does not provide a credit card number, the scam artist shares a counterfeit or stolen card number that enables the consumer to access the property, tricking the consumer into thinking the property actually belongs to the scam artist.

The WMC Action News 5 Investigators traced the card number the scammer provided to Nigeria, where it has been used in several scams.

"He was able to kind of use the [Rently lockbox] system against us," King said.

"Both the number and credit card have been blocked from future use," said Rently spokesperson Merrick Lackner. "As a result of our geo location technology...[and the renter realizing] that someone providing a credit card to register was a red flag, we were successful in preventing fraud."

When we confronted 'Pastor Sias' on the phone with his attempted fraud, he insisted he owned the property. When we told him we confirmed he does not own the property and our intent to alert the authorities, he ended the call.

We encouraged King to report this scam on the Better Business Bureau's Scam Tracker. It put the scammer's name, phone number and email address on blast. "We'll put him on blast on Scam Tracker so that other people can use that as a warning, but a consumer does not have to have a scam artist's name or information to report a scam," said Nancy Crawford, director of communications of the Better Business Bureau of the Mid-South. She showed how consumers can use the Scam Tracker to track scam trends right down to their individual neighborhoods. "It helps other consumers know what's going on so that they don't become a victim," she said.

To make sure you don't become a victim of a rental property scam, Reedy & Company offered these tips:

* MEET WITH THE OWNER OR THE PROPERTY MANAGEMENT COMPANY IN PERSON. Anyone physically showing a piece of property must either be the owner or must be a licensed real estate agent. If they cannot meet at the property, then get their business address and meet them there.

* NEVER WIRE FUNDS. Anyone requesting that you wire them funds via Money Gram, Western Union, Walmart, whatever, is more likely someone who is running a scam.

* IS IT TOO GOOD TO BE TRUE? Just like the $800 deal pitched to McCulley, if it sounds too good to be true, it likely is. Check what other homes in the area are renting for and make sure the home you're interested in is in line with the rest of the market.

* GOOGLE THE PROPERTY'S ADDRESS. You would be surprised how much information you will find. A lot of scammers copy and paste ads from large companies like Reedy & Company in order to perpetrate their scams. Use only the actual property management company's site or reputable third-party sites like Trulia or Zillow to shop rental listings. You should also check your county property assessor's site to confirm the property's ownership, specs and sales data.

* ASK QUESTIONS. There is nothing wrong with you having the full picture before you rent. Someone who is rushing you to send in funds is probably someone scamming you.

For Chief Consumer Investigator Andy Wise's Bill of Renters' Rights, please click here.

Copyright 2016 WMC Action News 5. All rights reserved.