The Apartment List analysis, "Million Dollar Scam: Rental Fraud Costs 5.2 Million U.S. Renters," is based on a national survey of 1,126 renters, in addition to local surveys of 50-54 renters in each of the thirty largest U.S. metro areas, including Denver.
The findings reveal that renters under age thirty are the most likely to be scammed nationwide, and falling into such traps can be costly. One of three victims lost more than $1,000, usually after paying a security deposit or first month's rent on a nonexistent property.
The problem is particularly acute in Denver, where 37.8 percent of respondents confirmed that they'd encountered a fraudulent listing. That figure is larger than in all but six other cities: Cincinnati, Los Angeles, Phoenix, Sacramento, San Diego and San Francisco.
Furthermore, 8.9 percent of Denverites quizzed say they lost money. Only the percentages in Atlanta and Dallas were higher, with Las Vegas finishing in a tie.
Why are so many of these schemes taking place in Denver?
"Fraud is most common among people who are new to a city, in particular those who are renting sight unseen, and millennials," notes senior research associate and report co-author Sydney Bennet, corresponding via email. "The high number of people from out of state moving to Denver, and in particular young college graduates, is likely contributing to these high fraud rates."
Bennet adds: "Young renters, aged 18 to 29, are 42 percent more likely to have lost money to a rental scam because they have less experience with the rental market. Additionally, fraudulent listings tend to advertise rentals at too-good-to-be-true prices. With Denver’s rapid post-recession rent growth, lower-income renters may have fallen for these scams while looking for rentals they could afford."
Here are Bennet's descriptions of the top five rent scams in Denver and beyond.
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"This scam occurs when a different property is advertised than the available rental and the scammer tries to collect a deposit or get a lease signed for this property. By posting pictures of better-looking rentals, the owner is able to lure in tenants before revealing the property."
Number 2: Phantom Rentals
"This occurs when a scam artist makes up listings for places that don’t exist or aren’t rentals and tries to lure renters with low prices. In this type of fraud, sometimes scammers list the address of a commercial building as a rental."
Number 3: Hijacked Ads
"This scam occurs when a fake landlord posts advertisements for a real property with altered contact information. Homes for sale are often re-listed as rentals in this type of fraud. Since these ads are virtually identical to real rental listings and the properties do exist, they are harder to identify."
Number 4: Missing Amenities
"This type of fraud occurs when an apartment is substantially different than advertised. A real rental is listed as having features and amenities it lacks in order to collect a higher rent — the rental market equivalent of catfishing in online dating. The leasing agent tries to get renters to sign the lease before they notice the missing amenities. The most commonly lied-about amenities are laundry, heat/AC and outdoor space."
Number 5: Already Leased
"This is when a real or fake landlord attempts to collect application fees or security deposits for a rental that is already leased. In this type of fraud, the properties are real but are unavailable."
According to Bennet, there are a number of ways to identify a rent scam in advance, before becoming a victim: "When viewing online listings, avoid listings that lack an address or pictures, offer too-good-to-be-true prices or advertise that there’s no screening process. If exterior pictures are provided, verify the rental using Google Street View. Additionally, search the address on other listings sites and verify the contact information is the same."
She adds: "Before signing a lease or making any payments, visit the property in person. If you are unable to visit the property, find someone you trust to visit for you. Look up the landlord online to verify that they are the true owner or manager and ask to speak to the current tenants for additional information. Make sure to read and sign the lease before paying the security deposit or rent, and make payments using a credit card or check rather than cash or a wire transfer."
These methods aren't foolproof, Bennet acknowledges: "Unfortunately, even the most careful renter may become a victim of rental fraud. If you’ve experienced rental fraud, you can file a report with your local police department and contact your state consumer protection agency for assistance. Federal agencies usually can’t act on your behalf, for example, by helping return a fraudulent deposit, but they can use complaints to identify patterns of abuse. Additionally, we recommend reporting the online listing to ensure other renters don’t fall prey to the same scam."
She offers this advice: "We recommend that Denver renters are mindful of scams when looking for a rental. For example, they can use trusted search platforms, read listings thoroughly, search the rental online to detect scams, and report any scams they have experienced."
This last suggestion is particularly vital. After all, she notes, "Rental scams exist in all of the nation’s largest metros, and there are no signs that scams will disappear."
