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A Flash in the Pan: Colorado's Rental Scam Shakedown
October 19, 2021

A Flash in the Pan: Colorado's Rental Scam Shakedown

by The CE Shop Team

Renters in Colorado, Beware!

Colorado's real estate scams and schemes aren't a new occurrence. Lou Blonger famously terrorized Coloradoans for 30 years in the 19th century, owning and operating fake gambling halls and saloons on Larimer and Stout Street. Since the West was wild, scammers have continued to swindle unsuspecting residents of Colorado. 

Recently, ApartmentGuide.com released a report using scam tracker data from the Better Business Bureau (BBB) that shows Colorado has the fourth most rental scams per capita.

Rental Scams on the Rise

The report from ApartmentGuide.com revealed Colorado has lost $33,561 in rental scams since 2015, and on average, Colorado residents lose $578 per scam. The average rent in Colorado is $1,463, up 3% compared to 2019. Losing $578 on rental scams is nearly 40% of one month’s rent in Colorado. 

Source: Apartmentguide

“The rental scams reported in 2020 were higher than any other year that we analyzed. And we think migration probably played a role in that. [Colorado] was the 8th most moved-to state last year,” said Kylie Moore, an analyst who worked on the report, in an interview with Fox31 News.

Colorado’s outdoor appeal and relaxed lifestyle attracted troves of new residents over the past five years, and this flood of new residents is unlikely to stop anytime soon. Colorado's population is projected to grow from 5.6 million people in 2017 to 8.7 million in 2050, largely due to out-of-state residents wanting to call Colorado home.

Christina Cimino is a resident of Colorado who spent a month searching for a home that would be perfect for her family of four. She stumbled across a three-bedroom home in Aurora that was listed for $1,250 a month on Facebook Marketplace.

“They had a whole listing, specifications of the house, square footage, everything — just like a regular ad you would see for a rental,” Cimino said in an interview with Denver7

Cimino only contacted the “owner” by text and received instructions to self-tour the property, as well as electronically deposit $2,500. Her contact told her she didn’t need to fill out an application and wouldn’t receive the property lease until after the deposit was made. 

She asked the fraudulent owner to meet in person, and they told her they were out of town. Next, she tried calling them, was told they could not hear her, and hung up. Growing concerned, Cimino decided not to pay the deposit.

Cimino reported that her younger self would have fallen for this type of scam. However, her attention to detail and wisdom from previous experiences saved her from getting scammed out of thousands of dollars.

Colorado Has 4th Most Rental Scams Per Capita

Most Common Real Estate Scams

As a real estate professional, you are responsible for protecting your clients’ interests and should be aware of common real estate scams and schemes. Here are the five most common real estate scams to keep an eye out for:

1. Escrow wire fraud: Scammers claiming to work with your client’s title or escrow company will reach out to them with instructions on where to wire their escrow funds. Fraudsters will go to great lengths to enact this ruse, even setting up fake websites that appear similar to the title or lending company your client is working with, making their request seem like the real deal.

2. Loan flipping: Loan flipping occurs when a predatory lender persuades a homeowner to refinance their mortgage repeatedly, often borrowing more money each time.

3. Foreclosure relief: Homeowners who fall on hard times and get behind on their mortgage payments can become desperate to save their homes. Scammers will swoop in with offers of foreclosure relief to capitalize on homeowners’ vulnerability. In reality, they’re just collecting a large upfront fee with no real intentions of helping the homeowner.

4. Rental scams: Scammers post fake property rental ads on Craigslist or social media using photos from other listings to lure in unsuspecting renters. Fraudsters, who have no connection to the property or its owner, will ask for an upfront payment to let your clients see the property (or hold the money as a “deposit”).

5. Moving scams: Your client has found a new place to call home, and now they have to find a way to move all of their belongings. They might fill out a form for a moving company estimate, outlining all their items, and receive an estimate for $4,000 to ship them from their current home to their new one. Once this is done, the “company” will raise the estimate and corner your client into paying more to give their belongings back.

If you see any sign of these common housing scams, report what you find to the Federal Trade Commission. For scams found online, file a report with the FBI Internet Crime Complaint Center.

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