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How to avoid rental fraud

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The search for a good rental property can be a difficult process, and the last thing you need to worry about is being scammed or defrauded. Rental fraud isn’t new, but increasingly advanced technologies and easy access to information have resulted in a greater risk of scams — leaving would-be tenants wondering how to avoid rental fraud.

To help, we list the most common types of rental scams and frauds and provide a list of the most significant warning signs to watch out for when searching for rental accommodation.

What is a rental scam?

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All fraud has one thing in common: To get your money.

When it comes to rental fraud, a potential tenant can be deceived in a number of ways. So, how can you protect yourself from rental fraud?

Although some forms of fraud are obvious, others are a lot more sophisticated and difficult to recognize. The most common fraudulent tactics include:

  1. A landlord isn’t legit: A fraudster can pose as a landlord, complete with a fake lease. Often, when this happens the person posing as a landlord will use pressure to get you to “sign” the lease and hand over deposit or rent money. Don’t do it.
  2. Rental unit isn’t for rent: One popular method, particularly for short-term rentals, is to post pictures of a property along with rental details. While a quick search on Google would show that the unit is a rental, the unsuspecting potential tenant doesn’t realize that this particular unit isn’t currently for rent.
  3. Fake rental listing: A person posing as a landlord can try and rent out a unit or property without authorization (or notification) to the actual owner of the property.
  4. Sight unseen: Some fraudsters attempt to pressure potential tenants into sending money (either as a wire transfer or as an e-transfer) by suggesting that the unit is in high demand. Putting money down on a unit you’ve never seen is never a good idea.

The key is to not let your guard down when looking for an apartment. Just because you use a reputable online rental site doesn’t mean you can’t get scammed by unscrupulous landlords or people posing as landlords.

How to Spot Rental Frauds?

how to find rental scams

“If it sounds too good to be true, it probably is.” While this is an old cliche, the sentiment certainly applies when it comes to trying to find a rental apartment. To help you spot a rental fraud, the Canadian government suggests looking out for these eight signs :

  1. The monthly rent being asked is far below the current rental market rates.
  2. The landlord asks you to place a deposit without a formal lease agreement.
  3. You’re asked to pay a deposit into a bank account outside of your country of residence.
  4. The landlord doesn’t ask for any information about you, nor request a background check.
  5. After finding the listing online, you’re directed to another website that asks for personal or financial information.
  6. There are no photos of the inside of the property, just the exterior.
  7. The photos provided don’t seem to match the actual property you’re interested in.
  8. You notice there are several ads about the same property, all with varying contact information.

How to Avoid Being Scammed?

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These days, it seems as if you can’t do enough to protect yourself completely from scams. While we would all like to feel 100% safe when proceeding with any financial transaction, chances are we won’t some of the time. Thankfully, there are quite a few proactive steps you can take to reduce the chances of being a victim of rental fraud:

  • Never pay cash, as a cash transaction is harder to track (making it easier for the fraudster).
  • Always ask for a copy of the written and signed lease agreement before paying a deposit.
  • Never rent a place without having seen it in person, preferably more than once.
  • Ask to meet the landlord in person.
  • Talk to the current or previous tenants of the property or ask the landlord for referrals.
  • Make sure that the name on the lease agreement is the actual name of the landlord you’re dealing with.
  • Do some research on the property beforehand (Google the address, check out For Sale listings, etc).
  • Don’t be pressured to sign a lease immediately.
  • Consider consulting a legal expert before signing the lease.
  • Avoid all sub-leasing scenarios.
  • Enlist the help of a licensed real estate agent (this person would vet and confirm the rental unit’s owner, prior to showing the listing).

What If You Get Scammed?

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If you become the victim of a rental unit scam, you might feel lost or even embarrassed. Not to worry. It can happen to the best of us. What you need to do if you suspect fraud, is take immediate action. The sooner you act, the greater the chance of getting your money back.

  1. Call the police: Letting local enforcement know you’ve been scammed allows the police to investigate quickly — and the faster they can act, the greater the chance the fraudster is found and caught.
  2. Contact the rental ad publisher: If you saw the rental ad online, contact the owner of the website. Explain to them what happened and show the information you’ve gathered. The publisher may take steps to prevent this person from scamming others in the future, or the publisher may go the extra step of trying to find other victims (and then submitting all this information to local police to help their efforts at capturing this person).
  3. Contact the Anti-Fraud Centre: This joint-venture — operated by the RCMP and the Competition Bureau — specializes in collecting facts and details about fraud that occurs in Canada. The aim is to educate Canadians and help individuals address fraudulent situations.
  4. Educate yourself: It’s easy to blame yourself and to fall into a shame spiral. Don’t. Being a victim of fraud is not a shameful situation; you are the victim — remember that. Now, to help yourself come to terms, start by examining what happened and try and spot the red flags. The idea is to help you learn from the situation, rather than emotionally beat yourself up.

Scams and rental frauds can turn what should be a positive, fun experience for eager tenants into a stressful, unpleasant situation. There are so many ways to get scammed that the process can be intimidating. To protect yourself as a tenant, use your tips and trust your instincts. It’s better to be safe than sorry.

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Romana King

Romana King is an award-winning personal finance writer, real estate expert and the current Director of Content at Zolo. Romana has contributed to business and lifestyle publications including CBC.ca, Toronto Sun, Maclean’s, MoneySense, Globe & Mail Custom Content Team, and The Toronto Star. Among her achievements, Romana won silver for her annual Where to Buy Now real estate package in the 2019 Canadian Online Publishing Awards. In 2015, she won a SABEW Business Journalism award. When she was editor of CI Top Broker, Romana helped guide her team to obtain its first KRW Business Journalism nomination, and in 2011, she was part of a small team that helped MoneySense win Magazine of the Year at the 34th annual National Magazine Awards.