Hawaii’s Better Business Bureau® (BBB) and the Honolulu Board of REALTORS® issued a joint alert today warning that scammers are using a popular web site to defraud potential renters and landlords. Both organizations have recently received local reports of rental scams appearing on craigslist.org.
One scam involves homes for rent being advertised well below market levels by someone other than the owner. The listings may seem authentic, complete with photos and property details often copied from legitimate web sites, such as the Honolulu Board of REALTORS’® www.HiCentral.com.
“Some of our REALTOR® members are being told by their clients, who have their homes on the market, that people are knocking on their doors and asking for a tour of the property as they would like to rent it,” said Rochelle Lee Gregson, chief executive officer for the Honolulu Board of REALTORS®.
Scammers list the rental on craigslist using an e-mail address that is similar to the one used in the legitimate ad. After responding to the listing, prospective tenants are told the supposed landlord is living out of state or in another country, and asked to complete a credit application requesting detailed personal information. After the application is “approved,” the renters are told that keys to the property will be sent via courier once their security deposit is wired to the landlord or agent outside of Hawaii. The renters wire the deposit, never receive the keys, and are out hundreds to thousands of dollars.
“More and more people are using craigslist to find a home to rent or to rent their own home,” added Dwight Kealoha, chief executive officer of Hawaii’s BBB. “But when you deal with people that you don’t meet face-to-face, you run the risk of working with unscrupulous people.”
In another scam, a prospective tenant responds to a rental listing and claims to be moving to Hawaii from another state or country. Their initial contact often includes mention of an employer or sponsor helping them with their relocation and the need to secure a rental as soon as possible. After sending a deposit check for well over the amount requested, the renter claims to have mistakenly written the check for the wrong amount, or that the extra money is to cover shipping expenses or purchase new furniture. The landlord is asked to cash the check, keep the amount required for the security deposit, and return the overpayment to the renter or a third party reportedly helping with the move. In the end, the check does not clear and the landlord suffers the financial loss.
“There are basic steps that renters and landlords can take to protect themselves against fraud, including working with licensed professionals such as a REALTOR® or a local member of the National Association of Rental Property Managers,” stresses Gregson.
Kealoha adds that tenants can protect themselves from identity theft with a simple request of the landlord. “Renters should not provide detailed personal information, such as their Social Security number, or complete a rental application without checking the potential landlord’s references.”
More tips from Hawaii’s BBB and Honolulu Board of REALTORS® for avoiding rental scams:
- Deal locally with people you can meet in person.
- Familiarize yourself with the craigslist web site, including its recommendations to avoid scams and fraud.
- Whether you are a tenant or landlord, be sure to have a detailed, signed lease in place before any money changes hands.
- Never wire money to strangers. Legitimate transactions don’t include pressure to send money by wire transfer services.
For Landlords
- Don’t accept a check for more than the amount requested, no matter how tempting the offer or how convincing the story. Ask the prospective tenant to write a new check for the correct amount and return the check originally provided.
- Ask that checks be drawn from a local bank or national bank with a local branch.
For Prospective Tenants
- Go to bbb.org for a Reliability Report on the landlord or property management company.
- The State of Hawaii requires all landlords of short- and long-term rentals have a tax identification number. Check the state Department of Taxation web site and search the tax licenses ensure that a potential landlord is registered.
If you think you have been a victim of a rental scam, report it to Hawaii’s BBB. Call 536-6956 or 1-877-222-6551 toll-free from the Neighbor Islands,
e-mail Hawaii's BBB, or file a complaint online at
bbb.org.
Established in 1945, the Better Business Bureau® of Hawaii (BBB) is a nonprofit organization that sets and upholds high standards for fair and honest marketplace behavior. BBB provides objective advice, free business and charity reports, and educational information on topics affecting marketplace trust. BBB also offers complaint and dispute resolution support for consumers and businesses.
Established in 1922, the Honolulu Board of REALTORS® is one of the largest of 1,600 boards of REALTORS® in the nation and, with over 6,000 members, the largest trade organization on Oahu. Membership is available to licensed real estate brokers, agents, property managers, appraisers, counselors and others engaged in all aspects of the real estate industry pledged to adhere to a strict Code of Ethics and Standards of Practice. For more information, call (808) 732-3000 or visit
www.HiCentral.com.