The Renting Foreclosure Scam

on Tuesday, 05 July 2011. Posted in Credit

The collapse of the housing market has brought about a new scam as thousands of foreclosure houses now lay unoccupied. A criminal will find a likely house and call a locksmith, stating that they have locked themselves out. Once they are in the house, they change the locks so they have control of the house. The next step is to put up a "For Lease" sign outside, which rarely attracts suspicion from the neighbors in the current housing meltdown.

The scammers advertise the home for lease or rent on various internet sites. Unsuspecting tenants are shown around the house and quoted a low rent, because the owner is "desperate to get rid of" the house. The criminal takes a deposit from the unsuspecting viewer, hands them a bogus lease and a set of keys.

From there, the scam goes one of two ways: either it continues to show the house and take deposits in exchange for keys, leases and a move-in dates over a couple weeks time; or is lets the unsuspecting tenant take occupation of the house and pay rent to a mailbox or untraceable bank account.

The tenants either try to move into the house and find their keys do not work and the landlord cannot be found; or worse - they move in, pay rent for a few months and then get a visit from the bank who wants to know why they are living in the house.

Either way, the tenant has lost hundreds (sometimes thousands) of dollars and is without somewhere to live or any way to contact his "landlord".

Be careful when contacting online advertisers. Ask your future landlord for references and contact them. Check your local newspaper to see if that landlord lists property in the newspaper as well. Contact your financial institution to find out if it has heard of this landlord before. Remember to be cautious!

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