BuzzBuzzHome Corp.
March 15, 2010

Think that tenants are the only people being ripped off on Craigslist? Think again!

Landlords are in just as much danger.

According to the FBI:

“Rental scams occur when the victim has property advertised and is contacted by an interested party. Once the rental price is agreed upon, the scammer sends a check for the deposit. The check covers housing expenses and is either written in excess of the amount required, with the scammer asking for the remainder to be remitted back, or for the correct amount, but the scammer backs out of the rental agreement and asks for a refund.

Because banks do not usually place a hold on the funds, the victim has immediate access to them and believes the check has cleared. In the end, the check is found to be counterfeit and the victim is held responsible by the bank for all losses.”

Yup. Of course, there are multiple twists on this… new-renters sending fake cashiers checks and money orders. Of course, the landlord is happy to have receive the money, and deposits it. But wait…. something goes wrong and the deal falls threw… uh oh… After the landlord refunds the funds, they find out that the cashiers check was fake and they are on the hook to return the money.

How to you protect yourself? Be Smart! Okay… if “smart” doesn’t cover you, check out these tips from the FBI:

  1. Do not accept overpayment for rental properties. If you receive a check that’s for more than the specified amount, return it. Do not deposit it.
  2. Do not wire funds to people you do not know.
  3. Verify potential renters’ income.
  4. Request renters’ personal references and follow up with those individuals.
  5. Check with your county recorder to learn who owns the property you’re seeking to rent.
  6. Call the property manager or association, if applicable, and ask about the landlord.
  7. Ask the landlord for a rental application. It’s a red flag if one is not available; most managed properties require an application.
  8. Find out how much of a security deposit may be requested in your state. Scammers will often ask for extra money in the form of a deposit.

Some unusal requests that should make you a bit cautious:

  1. The would-be tenant wants to rent or purchase the property sight unseen.
  2. The potential tenant says he or she is out of the country and he or she would like to send you a cashier’s check.
  3. The payment is for more than the agreed upon amount.
  4. There’s urgency to the entire process. For example, the tenant says he or she is arriving in the country next week and needs to establish residency right away.

Did you know the FBI was on Twitter? I didn’t @FBIPressOffice.

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