Renters Fear Scams in Tight Housing Market

LOS ANGELES — As renters across the nation navigate a competitive housing market, the rise of sophisticated rental scams is adding financial and emotional strain to an already challenging process. According to a new survey from Rently, 93% of renters believe scams are common, and 90% worry about falling victim themselves, fueling calls for industry-wide action.

The 2024 Rently Survey: Rental Scams and Fraud Report was conducted by the third-party platform Pollfish. To uncover the scale and impact of rental fraud, Rently surveyed 500 U.S. renters aged 18+ who have rented an apartment, condo or house within the last five years and have either experienced or are aware of rental scams. The findings reveal key insights into the growing rental fraud crisis and renters’ expectations for proactive solutions.

Key findings include:

• 93% of renters believe rental scams are common, and 90% worry about falling victim themselves. Of those surveyed, 46% said they are “very concerned” about falling victim to rental scams, highlighting the heightened anxiety surrounding the process of securing housing.
• 88% of scam victims found fraudulent listings on Facebook, making it the top platform for rental fraud. Scammers leverage Facebook’s wide reach and minimal security requirements to post fake listings. These listings often feature desirable locations (57%), below-market prices (55%), and immediate availability (52%) to entice renters.
• 62% of victims lost more than $500 to scams, with nearly half (48%) losing more than $1,000. A smaller but significant 8% reported losing over $5,000. Among victims, 70% had already paid a security deposit, 59% had paid an application fee, and 50% had paid their first month’s rent before realizing they were scammed.
• 39% of renters expressed distrust in online rental platforms, with a mere 0.6% claiming they “completely trust” them. Renters place much of the blame on rental platforms (40%) and landlords (23%), while 92% of respondents believe landlords and property management companies should adopt better technology to prevent fraudulent listings.

Survey respondents reported feelings of betrayal, anxiety and reduced trust in others. Stories submitted from scam victims include:

"I felt betrayed and foolish after realizing the scam. Now, every listing feels like it could be a trap, and I constantly second-guess myself."

"I’ve experienced mental health challenges as a result of this scam. It takes longer for me to trust people in new situations, especially when financial transactions are involved."

"I paid the deposit, first month’s rent, and even for a background check. When I showed up to move in, the locks were changed, and the ‘landlord’ had disappeared."

Actionable steps for the rental industry to combat fraud and rebuild trust:

Adopt secure technologies: Renters overwhelmingly support tools like identity verification, secure payment processing, past tenant reviews, real-time property viewing, and photo verification. Platforms that integrate these features can significantly reduce fraud and boost renter confidence.

Enhance Public Education: Tutorials, scam alerts and guides can empower renters to protect themselves. Renters also support forums for sharing scam experiences and hotlines to report suspicious listings. These resources help build a more informed and resilient rental community.

Provide transparency: Platforms that verify landlord identities and listing legitimacy can provide renters with greater confidence, deterring fraudsters and restoring trust in online rentals. Renters believe proactive efforts, such as past tenant reviews and photo verification, will further discourage scammers.

"As housing demand surges, scammers are exploiting renters’ desperation with alarming precision,” said Merrick Lackner, Rently CEO. “Beyond the financial loss, these scams create lasting emotional harm, turning what should be an exciting step into a source of stress and heartbreak.”

Lackner continued, "Rental fraud isn’t just a financial crime; it’s a direct attack on the trust and stability that renters depend on during one of life’s most critical decisions. Our industry must lead the charge in outpacing scammers with stronger safeguards, transparency, and education, ensuring every renter can search for a home without fear of exploitation."

Source: Rently

© 2024 Florida Realtors®