Online Scams in the Rental Market
Protect Yourself from Online Scams in the Rental Market
The rental property industry is not exempt from online scams including the friendly Canadian market, where newcomers to Canada may assume there is a safety net in place. With hot rental markets in major cities like Toronto and Vancouver, expect to come up against an online scam at some point in your rental search.
Regardless if you are a newcomer or resident, online scams in the rental market have unfortunately become more and more common, with scammers resorting to new tricks to swindle would-be-renters out of their money.
According to the Canadian Anti-Fraud Centre, the number of rental scams reported in 2017 was 210, with 102 victims and a total financial loss of more than $145,000. That’s up from 137 reports in 2015, with 49 victims and a total financial loss of slightly more than $72,000. Still, the CAFC estimates that fewer than 5 per cent of victims report their losses. While these statistics represent a small fraction of fraudulent rental practices throughout Canada, it’s important that suspicious activity is reported to local police authorities or to the CAFC as soon as possible to catch potential scam artists.
Buyer Beware
If it seems to good to be true, then it probably is. Suffice to say, this is one cliché that lives up to its promise when it comes to rental properties. So how can you avoid becoming a victim of an online rental scam?
Start with doing your research. Research including average rental prices and houses that are up for sale, as fraudsters may mirror them as rentals. Extra vigilance is essential when you’re looking for housing in a new place, where landlord and tenant rules may differ, and the housing market contrasts, what you’re used to back home. CPA Canada reports that despite the warnings, housing rental scams continue to make headlines, and are most common in areas with student housing (particularly in university cities such as Ottawa, Waterloo and Kingston), a high volume of condos and renter-centric neighbourhoods.
While sites like Craiglist, Kijiji or Padmapper may have multiple legitimate listings, try and trace listings to a source if you are unsure. For example, some fraudsters will use legitimate listings with property management or real estate companies, including the agents photograph and create email addresses that make the listing look like it is from a legitimate agent. Try and search the listing agents name, or the property address and make some phone calls to ensure that all ends lead to a real source and a person you can meet with, if you can’t find the source of the advertisement, report it to the listing site.
It is also a good idea to look at addresses and photographs of listed properties if you can’t seem to place the location to the listed property, something could be up. Properties that don’t link to an address that appears in a search may be an error or could be a warning sign.
Warning Signs of Online Rental Scams
- Rent is cheaper than the market rate or other houses/units in the area- search a reputable listing service to get an idea of average rental rates.
- Landlord requires payment in cash or through a wire transfer.
- Landlord requests a large amount of money, or multiple months’ rent in advance, to secure the place.
- Request for deposit (on rent, security or damage), without any agreement in place or from a landlord that is outside the country.
- Landlord is not available to personally show you the unit.
- You are offered a space without any background check (i.e. credit check).
- Ads that show the outside of the property only, or photos that don’t match the property seen.
- Ads are posted on multiple sites with different contact info.
- You send an email inquiry and are directed to a page requesting personal and/or financial info.
- You only receive text messages or email correspondence and the landlord remarks they are away or the person acting on behalf of the landlord is unavailable.
How to Avoid a Rental Scam
- Conduct an online search for the house or building’s address to find anything that may seem unusual or surprising.
- Visit the unit in person, with the landlord, property manager or the owner of the property and inquire about the history of the unit you are viewing (question neighbors). If the person claims to work for a Property Management company, make sure you see a business card, search out the company or call the listed phone numbers to verify their claim.
- Be cautious if you hand over cash, wire or send any money without meeting the landlord, verifying ownership and seeing the unit in person. If you must make a wire or e- transfer, always ensure there is a way to trace the destination of your payment and verify the names on accounts.
- Know your rights. Do not hand over personal information such as banking info, SIN number, passport number, etc. The only thing a landlord should need to check is your credit, but they do not need those details to do so.
- Carefully read your rental agreement and any other papers you must sign, including any fine print. If you feel uncomfortable with something, seek more information.
Using a professional and Licenced Leasing Agent or property management company who are familiar with the rental market and inventory can be a useful method in mitigating rental scams as they will know if something seems unusual. Agencies are easy to research and must be licensed in many locations.
The Takeaway
You can never be overly cautious when it comes to your cybersecurity. If something seems off, it probably is. Stay current on new ways fraudsters are targeting the public and report anything that seems suspicious to the police. One of the easiest ways to avoid online rental scams is to do your due diligence, work with a licenced and reputable property management company, and never hand over your personal information or funds unless you are certain of the legitimacy of your agreement.
For more information on cybersecurity visit The Department of Public Safety or to work with a licenced leasing agent at Rent it Furnished connect with us today.