October 20, 2021
CONSUMER ALERT: DEPARTMENT OF STATE AND DIVISION OF CONSUMER PROTECTION ALERTS NEW YORKERS ABOUT REAL ESTATE AND RENTAL SCAMS
Scammers Posing as Real Estate Agents Using Current Listings to Try to Steal Down Payments and Security Deposits
New Yorkers Should Follow Simple Tips When Looking to Rent Property
The New York State Department of State and the Division of Consumer Protection today alerted consumers about real estate and rental scams, in which scammers work to steal prospective tenants’ money when they are looking to rent a home or an apartment. Rental scams are executed by criminals in a variety of ways, but the goal is the same: bilk potential tenants out of as much money as possible. According to Federal Trade Commission rental fraud data, New Yorkers claimed losses of over $1.7 million during the last three years.
“Shopping for a rental home or apartment can be a stressful, expensive and time-consuming process, especially with scammers actively trying to take advantage of New Yorkers,” said Secretary of State Rossana Rosado. “I encourage New Yorkers who are looking for a rental property to follow basic tips to avoid losing their hard-earned money through deceptive practices.”
An emerging real estate scam involves scammers who fraudulently impersonate the identity of a licensed New York State real estate professional, and present the real estate professional’s license as their own. The scammer then attempts to “rent” a property that isn’t theirs to one or more potential tenants—sight unseen—making off with security deposits, first month’s rent or prepaid rent. The scammers take legitimate rental postings and re-post or advertise them with their own contact information, often at enticing, lower rates than the original advertisement. The transactions are generally conducted by phone, text message or email with the scammer asking for a wire transfer, prepaid debit card, payment on a cash-based app or other method of payment that is not traceable.
Other scams include bait-and-switch techniques where a different property than the one available is advertised; rentals that are listed with features they don’t really have in order to garner higher rent; and charging potential tenants fees for background checks, then stealing the money and disappearing.
REBNY President James Whelan said, “We appreciate efforts by DOS to raise awareness of this problem in order to help protect the interests of consumers and members of the real estate industry. In addition to harming renters, these reprehensible scams can severely damage the reputations and livelihoods of New York’s honest, hardworking real estate agents, and such behavior has no place in our state.”
New York State Association of REALTORS®, Inc. Chief Executive Officer Duncan MacKenzie said, “The New York State Association of REALTORS®, Inc., the largest real estate trade group in the Empire State, applauds the Department of State and the Division of Consumer Protection for publicizing these illegal actions. We join DOS and DCP in urging consumers to be cautious about all real estate transactions and to always verify the identity of those they are engaged with. We will share this important alert with our 65,000 members and the many consumers they represent.”
To avoid falling victim to a rental scam, New Yorkers should follow basic tips:
If a consumer has fallen victim to a rental scam, they are encouraged to file a complaint with the Division of Consumer Protection. When the Division receives complaints about real estate agents or brokers, the complaints are referred to the Division of Licensing Services, which is responsible for licensing these professionals.
About the New York State Division of Consumer Protection
The New York State Division of Consumer Protection serves to educate, assist and empower the State’s consumers. Consumers can file a complaint with the Division of Consumer Protection at https://dos.ny.gov/consumer-protection.
For more consumer protection information, call the DCP Helpline at 800-697-1220, Monday through Friday, 8:30am-4:30pm or visit the DCP website at https://dos.ny.gov/consumer-protection. The Division can also be reached via Twitter at @NYSConsumer or Facebook at www.facebook.com/nysconsumer.