Rental Scams on the Rise in California Amid Tight Housing Market

Pam Yeager thought she found her ideal rental in a charming bungalow near downtown Fullerton. The house was priced below the region’s average for a two-bedroom home, allowing her to be closer to her son. It aligned perfectly with the expiration of her current lease. However, she fell victim to an online scam, losing thousands of dollars to fraudsters.

“It’s ridiculous,” said Yeager, 53. “There has to be some sort of accountability.” She isn’t alone in facing such challenges. Experts say these real estate scams are becoming more common and difficult to manage.

In California, the tight housing market and high rents are fueling scams. Criminals exploit people desperate for affordable housing. Scammers create fake listings on social media or other online platforms. They sometimes use artificial intelligence to fake legitimacy. Often, the scammers copy existing listings, collecting deposits before victims discover the fraud.

Many people look for rentals and homes on social media, leading to increased scamming opportunities. Police warn of limited oversight on these platforms. “Especially in this housing market, it gets competitive, and people feel pressure to act quickly,” said Sgt. Lizbeth Gwisdalla from the Orange County Sheriff’s Department. “If it sounds too good to be true, it probably is.”

Scams are on the rise, according to Chris Duff, president of Greater Los Angeles Realtors Association and co-owner of Beach Real Estate Group. “This is not something new, but it’s getting worse every year.”

Recently, the Placentia Police Department noted a significant increase in rental scams on social media. Residents were cautioned against sending money without visiting the property first. Sgt. Frank Garza from Placentia Police highlighted the difficulty of holding scammers accountable since many use burner accounts or foreign-based operations.

The Zillow listing for Yeager’s potential home was only up for a day. Yet, it drew enough attention to raise suspicions. A fellow interested renter contacted Laura Spencer, a real estate agent familiar with the property. Spencer confirmed that the home was never intended for rent. Unfortunately, Yeager did not receive this information in time.

Zillow stated that they strive to provide a safe online platform by preventing fraudulent postings. They urge potential renters to be aware of red flags signaling scams.

Yeager received a text following the listing removal, asking, “Still interested?” She was eager and followed up with the supposed landlord, who offered a video tour. The video was a copy of a previous real estate agent’s tour. Despite her initial hesitations, Yeager proceeded.

Once application and deposit fees were requested, totaling $2,500, Yeager hesitated. A call with the supposed landlord reassured her, and she sent the money, later facing demands for further payments. As the scam unfolded, she requested her money back, but communication ceased. Yeager lost $2,575. To cover expenses, she took extra work hours while feeling apprehensive about her ongoing rental search.

Yeager shared her story to prevent others from experiencing similar scams. Raising awareness is key, experts say. “Do not give your money out until you’ve met the agent or the owner to ensure legitimacy,” advised Spencer.

Although tracking scammers is possible, it is challenging. The process involves extensive investigations and data tracking. Many scams go unreported due to victims’ embarrassment or belief that resolution is impossible.

The FBI recorded over 12,000 real estate fraud cases last year, attributed partly to the rise of AI aiding scams. Recent incidents across California involve fraudulent property listings and financial loss.

The intended rental remained occupied, with the homeowner unaware her property had been used in a scam. She expressed regret for those affected, acknowledging the prevalence of scams today.