The new world of Rental Scams

It's hard to imagine a time when looking for a new apartment didn't involve Craigslist,Viewit.ca, or some other online rental database. These online applications allow renters to narrow down apartments by location, price and amenities. But just as these databases have made it easier to post and find rentals, they have also made it easier for scammers to operate.

"This newfound convenience has opened new ways for scammers to trick you out of your money," says Dave Dugdale, owner of two Colorado-based rental sites and developer of an online rental scam screening tool.

The genesis of this story came about through my own search for an apartment in Toronto. Naive when it came to rental scams, I was shocked to find that nearly half of the potential landlords I contacted through free online classified sites ended up fitting the profile of scammers.

"The Internet is a fertile breeding ground for fraudsters of all stripes," says Garry J. Wise, a Toronto-based lawyer. "Increasingly, fraud artists are developing sophisticated scams aimed directly at specific populations and sectors... It is no surprise that the tenancy market is also being affected."

That being said, here are some ways to help you spot a scam.

Blueprint of an online rental scam
Most rental scams follow a similar and very predictable pattern.

To start, "the scammers go to other websites and grab photos and a description. These could be from a real estate listing or from other rental sites," says Dugdale, adding that he's been surprised by the laziness of some scammers. He recalls an ad he came across that had been duplicated and reposted in several different cities: the ad mentioned ski lift views for a Miami-based apartment!

Rent for scams are typically well below market value. So, "instead of the rent being, say, $1,300 a month they'll make it for, say, $800 a month. A scream," says Dugdale. "This is so they'll get lots of leads."

In most cases the potential landlord is a doctor, priest, humanitarian worker, businessman or member of the Canadian Forces who claims to have been transferred to another country for work. Thus all communication is done via e-mail or, more rarely, by telephone and the landlord is unable to meet the tenant in person or show the actual rental unit.

Through e-mails the landlord will stress their integrity and trustworthiness and will offer the place after requesting minimal details from the tenant. Finally, the landlord will request the tenant send a deposit by mail, after which the landlord promises to mail a set of keys to the tenant.

"And of course the keys never come because (the landlord) never owned the house in the first place," says Dugdale.

How to protect yourself
When using free posting sites like Craigslist, be extra cautious about potential scams. Craigslist posts safety tips for users (www.craigslist.org/about/scams) while stressing the following simple rule: deal locally with folks you can meet in person. "Follow this one simple rule and you will avoid 99 per cent of the scam attempts on Craigslist," says Susan MacTavish, a spokesperson for craigslist.

If you are searching for a place on a paid posting rental site, contact the site developer to see what mechanisms they have in place to filter out scammers. For example, Dugdale keeps and makes public a database of e-mail addresses of scammers.

Be wary of landlords who ask inappropriate questions, says Wise. At various times I was asked about my marital status, my weight and if I work late at night. When I asked one landlord to justify the personal questions they were asking, their response simply said that they had a good feeling about me and had decided to offer me the apartment. "It is best to just walk away if a prospective landlord's actions don't seem businesslike or appropriate," says Wise.

The number one tip-off for a scam is probably the listed rent, so pay attention to prices. "If it sounds too good to be true, it probably is -- stay away," says Wise.

Also, it's important to "make sure that the person you're talking to is the actual owner," says Dugdale. To ensure that you are dealing with the owner of the unit, go to the local assessor's website and type in the address or parcel number of the property. For example, to verify the ownership of a property in Toronto you can check the assessment rolls through the city's Clerk's Office. If the name that comes up doesn't match the name of the person you are dealing with, be concerned.

"When in doubt, a lawyer can assist by ensuring that the prospective landlord actually owns the unit to be rented. A lawyer can also verify the validity of any Ontario corporation that purports to offer units for rent," says Wise.

I've been had: Now what?
If you suspect you've come across a scam, there are several ways to proceed. One option is to contact the Canadian Anti-Fraud Call Centre or the Competition Bureau Canada. Both organizations offer resources and support for those looking to report or prevent scams.

If you have come across a suspected scam on a rental site, such as Craigslist, contact the moderator. Craigslist users are asked to e-mail the details of potential rental scams to abuse@craigslist.org so that postings can be flagged or removed.

Finally, if you have become victim to a rental scam, "contact your local police force at once," says Wise, adding, "It may not be possible to trace a fraudster who has truly 'disappeared,' but if you have been defrauded and are able to locate the culprit, you may claim reimbursement and damages of up to $25,000.00 in Ontario's Small Claims Courts."

After sifting through thousands of postings and hundreds of likely scams, I found a fantastic apartment through a landlord who was willing to meet with me in person and provide documentation. My biggest problem now is unpacking....

Feel free to read any of my other posts or come by to see me at White House Mortgages on Cooper Road.

adams.mortgage@shaw.ca or 1 (250) 826-5679 I am a mortgage broker in Kelowna and always wanting to help.

(By Amy Brown-Bowers • Bankrate.com)