Common rental and landlord fraud schemes

Rental and landlord scams are more common than you think. Read this article to help avoid rental scams.

Credit cards to pay for deposits before a lease could be the sign of a rental scam

Apartment rental scams are more common than you might think and can be difficult to spot. As you're hunting for your next house or apartment to rent, look out for these red flags to help avoid future rental scams.

Are you being scammed? How to tell if a rental is legitimate

  • Requesting deposit money first. Scammers will try to get you to hold the rental and send money before ever meeting you, showing the property, or having you sign a lease. If the listing asks for payment or wired money up front, walk away from this potential security deposit scam.
  • Landlord or leasing agent not available. If the person who replies to the listing claims to be out of town, sick or simply unavailable to meet, yet still demands a security deposit, the listing could be a scam. Scammers avoid meeting so you can't report them and they escape with your deposit. A legitimate landlord will arrange to meet you in person and show you the property.
  • Fake or false listings. Even if you meet the landlord, you should still view the property before signing a lease. It's easy for scammers to copy another listing and claim to have a fake property. Another red flag is a request for an unusually high security deposit, as the scammer will quickly disappear after receiving the money.
  • Added fees for background checks. While it is common for landlords to check a potential tenant's credit and backgrounds, some landlord scams involve requiring potential tenants to pay exorbitant fees to cover these checks.
  • No lease required. Without a lease, you might be at risk for potential problems. Even month-to-month leases usually have some form of agreement that outlines the responsibilities of both parties.

How to spot a rental scammer on craigslist and other online classifieds

If a listing sounds too good to be true, it most likely is. Proceed with caution when you see these types of listings:

  • Apartment lease is more than a great deal. If you find a listing in a popular neighborhood that's a few hundred dollars less than other rentals in the same area, chances are you are looking at a fake listing. The scammer most likely copied from a real listing, and is offering at a lower rate to appeal to unassuming renters.
  • Replicated apartment photos and description. It's a good idea to pay attention to the photos of the listing. If you notice a Multiple Listing Service (MLS) watermark, chances are the scammer copied the photos from the local real estate MLS. You can verify this by either performing a reverse image search or searching the address to see if the property is listed for sale on other real estate sites. And, a lot of times, a Craigslist listing is identical to the MLS description.
  • Vague details in the rental listing. If the listing seems overly vague or doesn't make sense, it could mean the person creating the listing has never seen the property.

You're a victim of a rental scam

  • Call the police so they can help find the scammer and possibly get your money back.
  • Contact the publisher of the listing so they can remove it from the site.
  • Notify the Federal Trade Commission which is responsible for protecting consumers.
  • File a complaint with the Internet Crime Complaint Center which allows people to report crime that happens online.
  • Think about sharing your story to warn others of what happened to you. Don't lose hope! You'll find the perfect property.

The best way to avoid landlord frauds is to meet the landlord and tour the rental property in person. This may also give you a chance to ask questions about the lease terms and management of the property.

The information in this article was obtained from various sources not associated with State Farm® (including State Farm Mutual Automobile Insurance Company and its subsidiaries and affiliates). While we believe it to be reliable and accurate, we do not warrant the accuracy or reliability of the information. State Farm is not responsible for, and does not endorse or approve, either implicitly or explicitly, the content of any third party sites that might be hyperlinked from this page. The information is not intended to replace manuals, instructions or information provided by a manufacturer or the advice of a qualified professional, or to affect coverage under any applicable insurance policy. These suggestions are not a complete list of every loss control measure. State Farm makes no guarantees of results from use of this information.
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