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Rental Scams on the Rise: Austin Woman Loses Thousands
October 19, 2021

Rental Scams on the Rise: Austin Woman Loses Thousands

by The CE Shop Team

Don’t Fall Prey to Phony Listings

In hot real estate markets like Austin, where housing competition is fierce, it’s easy for fraudsters to swindle eager residents who need a place to call home. As Austin’s population continues to grow, the influx of new residents could become a fresh pool of victims for ne'er-do-wells across the Lone Star State.

Unfortunately, that's exactly what happened to Michelle Deloach. She knew that finding a place to live in Austin isn’t easy; when she thought she found the perfect home, she felt like she needed to act fast.

 “We were so excited. It came with a dog door, a guest house, and everything,” said Michelle Deloach in an interview with KXAN News. “[Homes] in Austin go like that, so we thought, ‘We love this house, let’s jump on it.'”

How Deloach Got Duped

The home was listed on Zillow and offered everything Deloach was looking for and more. She communicated with the supposed owner over email and electronically deposited the required funds.

“We sent over the deposit and the dog deposit and first month’s rent,” said Deloach. “It all added up to be $5,200.”

After the deposit was made, Deloach recalled feeling excited about moving in and pleased with how easy the process had been thus far. The excitement of a new home quickly came crashing down when she went to the property to meet the “owner” and pick up the key, but no one showed. The contact she had was not responding and, after reviewing the fraudulent rental agreement, reality began to set in.

“What was supposed to be an exciting time has now become a huge nightmare,” she said.

Now down thousands of dollars and with no place to go for the time being, Deloach hopes her story will help others avoid meeting the same fate.

Rental Scams Are on the Rise

According to the FBI, more than 13,600 people were victims of real estate or rental fraud last year alone. That ranks real estate and rental wire fraud number seven out of more than 30 types of fraud tracked by the FBI's Internet Crime Complaint Center.


Source: Apartmentguide

The M.O. of these scams is simple. Scammers post fake listings on rental sites like Zillow, Redfin, and Craigslist with the goal of tricking people into paying phony application fees and rent deposits. These fake ads are usually direct copies of past or current listings and utilize photos from legitimate homes on an MLS.

 The Better Business Bureau (BBB) tracks all scam complaints and organizes them in an interactive scam tracker. The BBB says rental scams and wire fraud are a growing trend, especially in areas like Austin where many people are moving.

“It is prevalent,” said Jason Meza, the BBB’s regional director in the same interview with KXAN news. “[Scams] should be on the top of every mind for everyone looking for a rental right now.”

Given that more and more nefarious schemes are unfolding lately, it’s crucial to understand what the most common real estate scams are, what they look like, and what red flags to be aware of — both for yourself and for your clients. 

Austin Texas Rental Scams on The Rise

Most Common Real Estate Scams

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, like Michelle Deloach. 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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