If you use Craigslist to buy or sell locally, then you know that you have to be careful. This popular site is prone to scams, and if you’re not paying attention, you could easily be tricked out of your hard-earned money or property.
Earlier this year we shared five major red flags to look for that can help you determine if it's a Craigslist scam. If you don't remember what they are, click here.
One of the biggest areas where scams hide on Craigslist is within real estate listings. Typically, these listings are for property rentals, but they can also be for private home sales.
Here's the worst part. A recent study by New York University Tandon School of Engineering revealed that Craigslist flags less than 50 percent of these fake listings as scams.
The study also revealed that these scams come in three primary categories. So, if you're using Craigslist to search for a new rental, here are the top three rental scams spreading now.
1. The credit report scheme
This scam is simple, and you might not even realize you're being taken advantage of. In this scam, the listing instructs the buyer to click on a link that authorizes the seller to run a credit check.
When the link is clicked, the buyer is automatically redirected through the scammer's server, which tacks on a referral ID. After that, nothing happens to alert the buyer that there's a problem.
The buyer pays the fee for the credit report (which is pretty common, so it doesn't seem all that abnormal), and the seller receives a nice commission from the credit reporting website for sending the referral.
In the end, the buyer typically never hears back from the seller, or the deal goes nowhere because the property listing is actually fake.
2. Cloned listings
This happened to homeowner John Darr in New Albany, Indiana when shortly after listing his home for sale, he began noticing some suspicious activity. People were coming to his house and looking around the property. Some were even coming right up to his front porch and peeking in through the windows.
He later realized what had happened. Scammers posted the details of his home as a rental opportunity on Craigslist. It was listed as a cozy three-bedroom, two-bathroom house for only $600 per month. And all the applicants had to do was send in their personal information, along with a security deposit.
However, Darr's home was not for rent. And, the listing to sell his home had been active for less than a week. He wasn't fully aware of what had happened until he received a strange message on Facebook.
"The message asked ... was I selling the house or was I renting the house? Because she had some concerns that somebody was running a scam with my name," Darr explained.
It was then that he became aware of the fraudulent post on Craigslist, which made several false claims. One of which was that the owners of the property were going to be leaving the country for three or four years on a mission trip.
The scammer had even offered false contact information, and would correspond with interested applicants. Through this correspondence, the scammer was able to obtain personal information from the victims, and even make arrangements for money transfers.
3. The realtor "service company"
In this scam, the seller asks the buyer to pay an upfront deposit and purchase a membership to a service that doesn't really exist. The buyers are promised that this membership will give them access to listings of homes that haven't hit the market yet, including pre-foreclosures and auctions.
When buyers sign up for the service, they believe they're gaining an advantage by being able to see properties that other shoppers don't have access to. But, in reality, the listings included are fake postings that the "company" has no connection to.
How to spot these scams
If you're going to look for a place on Craigslist there are obvious signs to watch out for. If you find a property you're interested in, place the address into a Google search and see what results are generated. If the property pulls up on other sites listed for sale, then make note of that inconsistency. It's a red flag.
Another major clue is a rental property where you're unable to meet with the owner, or some type of property manager. If no one can meet you at the home for a tour, then there's probably something fishy about the listing in general.
An extravagant story that explains why the owner will be away from the property is another sign. For a legitimate rental, you should never be asked to wire money to your new landlord, especially before you've had the chance to tour the property.
If you do find a property that you believe is listed as part of a scam, you can report it to law enforcement officials. You should also contact the website where you found the property so that the listing will be removed.