Real Estate Fraud Exposed: How Deposit Scams and Fake Applications Can Leave You Vulnerable to Identity Theft and Financial Loss
- Apr 12, 2023
In the real estate industry, scams have become a prevalent problem, with deposit fraud and fake applications being two of the most concerning. These can have a significant impact on personally identifiable information (“PII”), leaving landlords and renters vulnerable to identity theft, financial loss and reputational damage. It is essential to understand how these scams work and the steps that can be taken to protect oneself from these threats.
Deposit scams are one of the most common types of real estate swindles, and they involve fraudulent schemes designed to trick clients into sending money to scammers. These scammers often pose as legitimate real estate agents, property owners or managers, and they use tactics such as offering rental discounts or special promotions to lure clients into sending a deposit before viewing the property. Once the deposit is received, the scammers disappear, leaving the client with no rental property and no way to retrieve their money.
Fake applications, on the other hand, involve fraudulent applications for rental properties. Scammers use stolen PII to submit fake rental applications, often including a fake deposit payment. This type of con can be difficult to detect, as the scammers use stolen information to make the application appear legitimate. Once the fake application is approved by the landlord, the tenant occupies the unit, leaving the real property owner with a tenant who is often unqualified for the unit.
The impact of these types of fraudcan be severe, as scammers often have access to sensitive information, such as social security numbers, bank account information and credit card details. This information can be used to commit identity theft, leading to loss of money, reputation and credit. In addition, clients may be denied future rental or credit applications due to the damage caused by these scams, leading to long-term consequences for both tenants and landlords.
To protect oneself from deposit scams and fake applications in the real estate industry, it is essential to remain vigilant and take necessary precautions. Clients should verify the credentials of any potential real estate agent or property owner, verifying that the property is legitimate and never send a deposit before viewing the property in person or over a video call. In addition, clients should be cautious about sharing PII with anyone and should only provide sensitive information to trusted sources.
In conclusion, deposit scams and fake applications in the real estate industry can have a significant impact both landlords and tenants, leaving clients vulnerable to identity theft, financial loss and reputational damage. It is essential to remain vigilant and take necessary precautions to protect oneself from these scams. By verifying real estate agents, seeing properties in person, meeting prospective clients and properly vetting application data, property owners and tenants can safeguard their PII and minimize the financial impacts of real estate scams.
What's on Your Mind?
Philip Yellen is a Senior Manager within Outsourced IT and has nearly 15 years of experience in the technology industry.
Start a conversation with Philip
Explore More Insights
Life Cycles, Due Diligence, and Grit: How to Succeed as a Real Estate EntrepreneurRead More
Using Waterfalls to Allocate an Investment’s Distributable Proceeds: GP Catch-Ups with ExamplesRead More
Distressed Debt, Transaction Structures, and Opportunities: Real Estate Trends in 2024Read More
Receive the latest business insights, analysis, and perspectives from EisnerAmper professionals.