If you see the tempting online offer of an apartment in the Big Apple in excellent condition and at a very, very reasonable price… you should at least verify that this property really exists.
In New York City, nothing is more complicated, and almost impossible, than getting a renovated rental property, in a good neighborhood and that at the same time does not mean a monthly outlay of money that is very far from the possibilities of the working class.
In this labyrinth, marked by a crippling rise in housing rents, those looking for a place to live can come across schemes of deceptive offers. And, in the worst case, scams.
In general, Internet searches for apartments or rooms can be a quick and effective way to find places to rent. But if you don’t do the proper checks, you could be on the verge of falling into traps, which in many cases can cause you to lose not only time, but money.
Precisely recently, a new case came to light that lifts the veil on the deceptions of online applications, as the Attorney General of New York, Letitia James, and the Federal Trade Commission (FTC) obtained a judicial measure against Manhattan-based digital company Roomster, an online apartment search platform, for defrauding millions of renters nationwide by posting unverified apartment ads, listings, and fake reviews.
The action includes a monetary judgment of $36.2 million and civil penalties totaling $10.9 million payable to the states that were joined in the lawsuit. These amounts will be suspended after Roomster and its owners disburse $1.6 million to six states, due to the defendants’ financial inability to pay the full amount.
The court order also prohibits this corporation and its executives from purchasing and publishing false reviews about its listings to attract customers.
Roomster operates a website and mobile applications, where users can pay a fee to access housing listings, including rental properties, room rentals, subleases, and roommate requests.
The company claims to offer “authentic” and “verified” listings.
Apartments that do not exist
The complaint was filed in federal court together with the attorneys general of New York, California, Colorado, Florida, Illinois and Massachusetts, where the majority of those affected by these actions are located.
In this process, the “company owned by John Shriver and Roman Zaks is specifically accused of not verifying the apartments offered on its website, which promoted properties that do not physically exist. In addition to deceiving consumers, by including false positive comments on its website,” the prosecutor’s office confirms in a statement.
Attorney James and the FTC co-led the coalition of six attorneys general to stop these deceptive practices.
“In the midst of a housing crisis, Roomster deceived hundreds of students, young adults, and low-income renters for its own benefit. This court order prevents further fake reviews from being posted on unverified listings. And it prevents the company from harming renters trying to find a home in New York,” James confirmed.
How were they discovered?
An investigation, the details of which were shared by the New York prosecutor’s office, found that this digital corporation did not check the listings published on its platform by users, nor did it ensure that they were authentic.
A group of covert “sleuths” were able to easily publish on that platform a listing with the address of a US Post Office commercial facility.
The listing provided by the “disguised” officials had false rental specifications and remained online for several months.
At no point did Roomster contact the undercover investigators to verify the advertiser’s address, apartment details, email legitimacy, or other personal information.
“Looking for an apartment can be stressful. The last thing renters need is to be scammed by fake reviews and apartments that may not even exist. “I thank the FTC for its efforts to protect tenants across the country,” the prosecutor’s office reiterated.
The prosecution has been on the trail of this methodology of deceiving consumers since August 2022. Until the closing of this note, no reactions were obtained from the representatives of the accused company.
They bought fake reviews
It was learned, based on the crossing of several documents, that to give credibility to their long and tempting apartment offers, Roomster executives saturated the Internet with thousands of fake 4 and 5 star reviews.
“Roomster CEO John Shriber and CTO Roman Zaks purchased more than 20,000 fake reviews from Jonathan Martinez, a person identified in the investigation, as hired to increase visits to their platform,” the documents state. Of the investigation.
Martínez used more than 2,500 fake iTunes and Gmail accounts to post misleading reviews on Roomster apps. Before this “expert” in increasing traffic to Internet applications learned of the investigations, his website offered: “Buy application reviews and improve your ranking.”
The lawsuit alleges that Roomster executives intentionally and fraudulently displayed alleged positive reviews to increase their chances of increasing their digital presence.
On multiple occasions, the lawsuit states, Roomster executives ordered Martínez to publish a random number of reviews in various countries, specifying in their requests how many positive reviews should be sent to each country.
Some examples of fake five-star reviews, which this digital company bought from Martínez and published online, include supposed messages from satisfied customers such as: “Wonderful! Roomster is better than others. Very easy to use. Tons of listings. There are no scammers, all users are real. Easy communication with the owners. In a single word, fantastic!”
The strategy was that the large volume of false positive reviews would dilute the real ones, which were basically customers who rated the service with one star, with comments like: “I strongly recommend that you do not use this site! Because they will scam you! Out of every 10 posts, eight are scammers. Don’t use this app!!”
Online pollution
This digital company now in trouble, based on the order revealed by the prosecutor’s office, must ensure that its listings are authentic. Additionally, you should supervise your affiliate marketers.
All of this includes periodically reviewing its promotional materials, without prior notice, investigating consumer complaints about affiliates, providing refunds to consumers who were affected by the conduct of affiliates who violated the order. Also suspend payments and fire affiliates who pose as consumers.
With these actions, Roomster contaminated the online marketplace with fake reviews and listings, making it even more difficult for people to find affordable rental housing,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection.
“I almost fell into a trap”
But beyond the deceptive offers of supposed apartments located in beautiful neighborhoods and at a reasonable price, also the digital world and especially in the almost uncontrollable universe of social networks, can be the “gateway” of many fraudulent tactics aimed at people desperate for a roof.
As spokespersons for the National Consumers League have reported, rental scams are more common than people think. Even more so, when the coronavirus pandemic prompted the practice of virtual showings and online lease signings.
For example, Venezuelan Palmira Moreno, who has lived in Queens for 10 years, said that after months looking for a “bigger apartment” to rent, through a supposed real estate agent on the social network Instagram, she found videos and photos of a “ two bedrooms and two bathrooms” in Astoria. All at a price, which she described as “incredible.”
After connecting with the agent through text messages, he was required to “$300 refundable dollars” in the Venmo application, just to fill out the application, check his ‘background’ and have the right to see the property.
“For some reason I was filled with doubts. It didn’t seem right to pay such a high commission for that step alone. Although they insisted that if I didn’t apply they would return it to me. I tried to call and ask. I looked for the offices and the account disappeared within days. I’m sure I almost fell into a trap. The price of the apartment was ridiculous,” the merchant acknowledged.
What does the Consumer Financial Protection Bureau (CFPB) recommend?
- You should be aware that groups of scammers post fake listings on rental websites with the goal of tricking people into paying application fees and worse, fake rental deposits.
- These fake ads are usually versions of past or current ads.
- If you are looking for a rental, make sure you have seen it in person before paying an application fee or deposit. The same goes for personal information, such as banking details or your social security number.
- Scammers often ask to be paid via bank transfer or a payment app like Venmo, because it is difficult to reverse these payments.
- Some scammers even ask victims to put money on gift cards and give them the code on the back, which is a less traceable way to scam people.
- Please note that most landlords will request a paper check or another secure form of payment, and will only request payment after you have viewed the space, completed an application, and passed a background check.
- Scammers also trick people with rental prices that are cheaper than market value, to instill a sense of urgency that makes people “spend before they think.”
Report fraud!
- The Federal Trade Commission (FTC) works to promote competition and protect and educate consumers.
- Learn more about consumer alerts at consumer.ftc.gov, or report fraud, scams and bad business practices at ReportFraud.ftc.gov.