What’s the best rental scam I’ve ever seen in practice?

Well, I suppose it depends on how you define “best.”

Is the best scam the one that generates the most money?  Or is the best scam simply the most elaborate?

While I’m going to detail a rental scam that I witnessed, first-hand, earlier this year, first I need to regale you with the story of the truly “best” scam I’ve ever seen work.

Oh man, I hope my buddy doesn’t read my blog…

One of my very best friends, dating back to childhood, was renting a 3-bedroom apartment in the midtown area about fifteen years ago, and he ran through a fair number of roommates.

The first roommate of his, who he did not insist appear on the lease along side him, left five weeks into a one-year lease commitment.

It was all downhill from there…

Actually, for a short time, he was renting each of the other bedrooms for $550/month, and based on the $1,200/month rental he had signed, this meant he was paying only $100/month to live there himself.

But tenants came and went, and he ended up getting behind on the rent as he scrambled to find roommates one summer.

But then came a gift from the Gods: a woman answered his ad on Craigslist (or Kijiji, or whatever was around in 2006…) and said she would take the rental, sight-unseen!

The prospective tenant was a model from Europe who would be coming here in the fall and although she travels a lot for work, she wanted a home base here in Toronto.

My buddy was over the moon, although I wondered if maybe it had as much to do with the tenant being a model as it had to do with him gaining some financial security.

About two weeks later, my phone rang, and it was my buddy, who we’ll call “Dan.”

“I think I made a huge mistake,” Dan said, voice trembling into the phone.

I asked him what the problem was and he said, “I think I got scammed.”

I told him to slow down, start from the beginning, and explain everything to me.

And that, he did.

“Well, remember the model who was going to rent my apartment?” he asked me, and right then and there, I concluded that he did get scammed.  Just the words alone, “the model that was going to rent my apartment” sounded so ficticious, in hindsight.

“She did a shoot in Milan, and they paid her $4,000,” he told me, as this story began to round into form.

“She then went to Nigeria to do a modeling shoot there, and that’s when she mailed me her cheque from Milan.”

“Wait, she mailed you her cheque from Milan?” I asked.

“Yeah, well she needed to pay her four months of rent up front,” he told me.  “That was six-hundred dollars, times four months, so twenty-four-hundred dollars,” he explained.

I remember this conversation vividly.  I was sitting at my desk in the basement of our old office at 290 Merton Street, probably wearing triple-pleated dress pants, and definitely with Dippity-Doo-Gel in my hair.

“Okay, so she sent you a cheque for $4,000,” I slowly repeated the facts back to Dan.  “And why did she do this, exactly?”

“For the four months of rent!” Dan said, matter-of-factly.

“She owed me the $2,400 so she sent me a cheque for $4,000 so that I could send her back the difference,” he explained.

Now, I know what you’re all thinking.

You all just had that “Oh No” moment.  Maybe it was a shake of the head, perhaps a facepalm.

But whatever reaction you just had in reading that line above, trust me when I say that I had the exact same feeling fifteen years ago.

“Wait, why would she send you a cheque that was made out to her?” I asked Dan.

“She endorsed the $4,000 cheque over to me,” Dan said.  And for those of you who are under thirty, this was a thing back in the day.  If John wrote a cheque to Bob for $500, Bob could “endorse” the cheque over to Billy by signing the back of the cheque and writing, “Payable To Billy Jones” on the back.

So this lady in Europe, er, Milan, er, um, Nigeria, had a cheque payable to herself, signed the back and wrote “Payable To Dan Smith” on it, then sent it to my good buddy Dan.

All Dan had to do, it seemed, was to send the European model a cheque back for the difference of $1,600.

SOUNDS TOTALLY REASONABLE!

“So you got a cheque payable to this woman, that was endorsed over to you?” I asked Dan.

“Yes,” he said, optimistically, as though I was a detective, piecing together the clues, and he hoped the conclusion would work out in his favour.

“And then you sent her $1,600?” I asked Dan.

“Yes,” he said.

“And I’m assuming her $4,000 cheque bounced?” I asked Dan.

“Yeah,” he sighed.

“Well, it’s not all bad news,” I told Dan.  “Whatever bank teller took that endorsed cheque and did not put a hold on it, will ultimately bear some responsibility,” I told Dan.

There was a long pause and then Dan said, “Yeah, um, about that.  Well, I put it through the ATM.”

That’s when I decided Dan needed a bit of tough love.

“Dan, you got a message from a European model who wanted to rent a bedroom in your three-bedroom walkup apartment on Lawrence Avenue, who would pay you four month’s rent up front, who sent you an endorsed $4,000 cheque instead of sending you an actual cheque payable to you, for $2,400, and you put that $4,000 cheque through the ATM?”

He meekly replied, “Yesss?”

I was actually angry at Dan.  It was just so dumb.  Dan was a great guy; he is a great guy, still.  But he’s too nice and something like this was bound to happen eventually.

“When did you send her the cheque for the balance of $1,600?” I asked.  “Maybe you can stop payment on that cheque?”

I figured that maybe the snail-mail to Nigeria would take some time, and perhaps if the cheque hadn’t been cashed, then he could still get it canceled.

Unfortunately, after all the crazy things Dan had told me previously, his reply to this would take the cake.

“I didn’t send her a cheque.” Dan told me.  “She gave me instructions on how to wire the $1,600 to Nigeria through Western Union.”

Oh FFS.

You can’t make this up.

I remember telling my mother and she said, “Oh are you kidding me?  The Nigerian bank scam?  That’s been around as long as I have!”

It seems like everybody has heard of this, but nobody has ever met a person that was directly involved.

Well, I certainly did!

And what’s more is that if you’re a long-time reader of TRB, I’m sure you’re feeling like this story is familiar.  Although my efforts to find a blog post on this topic came up empty, I’m almost positive I’ve told this story before.

My buddy getting scammed by the “Nigerian bank scam” was way back in 2006 or 2007.  And since then, scams have become much more elaborate.

It’s almost scary just how common scams are.

When Rogers had that major power outage earlier in the summer, one of the agents on my team said, “Just wait – there’s going to be a scam where people pretending to be Rogers offer you $50 for the inconvenience and it’s just phishing.”  Sure enough, that happened.  We’re at the point where if you can think of a scam, it’s likely already been used.

On Monday, this article hit my news feed:

“Rent Scams Are On The Rise, And Students Are Particularly Vulnerable”
Financial Post
August 29th, 2022

I’m not surprised by this

None of us should be.

Considering how hot the rental market is, and considering that students are scrambling to secure housing for the start of the school year and desperation is setting in, I’d wager that scams are rampant right now.

Amazingly, the scams aren’t that sophisticated.

From the article:

The scams typically involve ruses aimed at conning prospective tenants into wiring money before seeing a unit in person. The perpetrators might dangle a below-market rate, but insist they can’t meet in person. By the time would-be renters figure out the person with whom they’ve been corresponding isn’t a landlord, they have already surrendered first- and last-month’s rent. Foreign students, desperate to find places to live before arriving for the school year, have been particularly vulnerable.

This is probably the oldest rental scam out there, save for maybe the Nigerian bank scam.

Rent a place that you don’t own.

Easy.

But the red flags should be quite apparent, whether it’s the fact that the property can’t be seen, or the landlord and/or their representative can’t meet, or that they don’t possess a key.

I’ve seen this scam in person as well, and I know I wrote about it on TRB.

From the files of “too good to be true,” an agent in my office was looking to rent to a friend, and having little success.  So the friend went on Craigslist and found somebody who was offering a condo well under-market, fully furnished, but it wasn’t available to be seen.  What was the reason?  The keys were all in England.  Yes, that’s right, the prospective tenant would be mailed the keys upon closing.

As dumb as this sounded, when the agent ran it by me, and I told her it was insane – and outlined all the reasons, her friend said, “Maybe it sounds too good to be true to most people so nobody has inquired, and that’s exactly why I’m going to!”

She didn’t get taken by the scam, but she’s lucky that her wilfull ignorance didn’t cost her.

There’s no excuses in her case, but in the case of international students, many who don’t speak, read, and/or write fluent English, and most who don’t know the process of renting here in Canada, you can see why so many are easily scammed.

At the risk of sounding like a shill for organized real estate, most scams take place outside of organized real estate.  Scammers will target landlords and tenants on Craigslist, Kijiji, View It and other third-party sites before they go on Realtor.ca.

Then again, after the experience that I’m about to detail, you can pretty much throw what I just said out the window…

I had a luxury condo for lease at $12,000 per month and historically that means your tenant pool is professional athletes, folks from the movie industry, and high-level businesspeople on short-term contracts.

I received an offer that looked perfect on paper, save for the tenant profile: two 20-somethings.

One of the cold-calls we received through the office was from two other 20-somethings, both Instagram “stars” who, according to Google, are worth $10 Million each.  So after touring them through the unit, I decided to cease with the ageism and keep an open mind.

The two 20-somethings that offered were both working in the IT Solutions sector, both making $300,000 per year, and both had credit scores in the 800’s.

They each had an employment letter and an Equifax credit report.  Both were in PDF form and looked solid.

They each had personal references and contact for their previous landlords.

And in case a $600,000 combined income wasn’t enough to carry $12,000 per month, they provided a screen-shot of their TD Bank account showing another $800,000 in their chequing.

Everything looked great!

They were perfect on paper, and the fact that they were expecting a child wasn’t a concern from the lost income standpoint, on account of their savings, and it gave me comfort as a parent, myself, thinking that these would be “good people.”

So what went wrong?

Well, I Googled the company that they worked for and the website came up, all well and good, looked legit.  It was a site for IT Solutions and since one of my best friends owns a large company in the same sector, I started to poke around the site.

At the very bottom of the site, however, was a major red flag: Copyright 2016

2016?  What year were we in?

It could be an honest mistake, right?  Except, if any website out there in any sector should expect to have the correct year in their copyright, it’s a website offering IT Solutions.

I started to check out the different sections of their website but that’s when I realized that there weren’t any!  All the links at the top of the site simply redirected back to the home page.  Nothing worked!  This site was simply a one-page, non-functioning placeholder on the Internet.

I then looked up the tenants on Instagram, Facebook, Tik Tok, Twitter, and finally Google, and there wasn’t a trace of them.

Show me two young 20-somethings that aren’t on at least one of these sites, and I’ll eat my hat.

Their employment letters were signed by somebody named “Tristan,” and that’s the real name – so if other real estate agents have run into this scam, please comment below.  Tristan had a functioning LinkedIn account and he had connections, so it wasn’t like that random Instagram account with the woman in a swimsuit, who has 6 followers, but wants to get together with you for some reason…

I called Tristan and he confirmed their employment, saying all the right things.

I asked him, “How come your website says ‘Copyright 2016’ on the bottom?” and he told me that my browser probably wasn’t working properly.

Then I asked him, “How come all the links on the site don’t work?  They all redirect to the existing page?”

He told me again that my browser was the issue and that I should clear my cookies and run a defrag and that would clear it up.

I then called the agent who presented the offer, and that is when things got weird.

The agent just sounded dumb.  I don’t know if it was a rouse or what, but he sounded way too cool for school.

He had an answer for everything.

I asked him to go to the company website and check the Copyright, the links that didn’t work, etc, and he said, “I don’t know man, I’m not that tech savvy.”

I asked him why his clients had no online presence whatsoever and why they weren’t on social media, and he said, “I’ve got a niece, man, she’s fifteen, and she’s not on anything.”

But when he said to me, “Did you call Tristan?” I knew he was in on it.

His voice changed when he asked me the question.  He went from moronic to somewhat directed and purposeful.

Finally, I said to him, “These tenants aren’t real, and neither is Tristan, this is a scam, and you’re in on it.”

Now, if you were running a scam like this, how would you react?

You’d probably either hang up the phone, or get really defensive, or maybe even get in my face.

He did none of the above.

Faced with an accusation of fraud, he kept his dumb rouse up and just laughed and said, “Hey man, I know there’s a lotta crap out there man, you gotta do what you gotta do.”

I kept pushing and said, “I’m going to report you to RECO,” and he just laughed and said, “Hey, it’s all good brother, it’s all good.”

I eventually hung up and then started a file with all his documentation.

The employment letters were real but from a fake company.  Fine.

But the Equifax credit checks and the scans of the driver’s licenses were impeccable!  I zoomed in and looked over every inch of these in Adobe, and I couldn’t see any photoshopping.

I forwarded the agent’s name and the contents of his “offer” to our in-house legal counsel and had a complaint filed with RECO.

We never heard from them.

But the story doesn’t end there!

I always reference “my friend from another brokerage” who really should have her own blog, or television show, or fantasy camp, but in any event, she seems to have her hand in everything in this industry, so on a whim, I forwarded the email to her.

My phone rang about thirty seconds after I clicked “send.”

“Vik?” she said, when I answered the phone.

“No, it’s David,” I replied.  “Are you on a booze cruise?”

“No, dumbass, I mean Vik, as in was it Vik that sent you the offer?”

It was.

How did she know?

“He sent me an offer on my penthouse listing last year and all his documents were bullshit!  The guy is a fucking con artist and he’s complicit!”

She went on to tell me a dozen stories about fraud in the rental industry and how many real estate agents are in on it.

“I caught this one girl sending me a driver’s license with the same photo of a chick, different name, two weeks after she submitted an offer to lease on one of my other listings, which she cleary forgot about!  I asked her, ‘Did your client change her name?’ and she just said, ‘Oh, sorry,’ and hung up.  Like, I just caught her in a fraud and she didn’t care!”

She actually reported this to the police, and of course, they did nothing either.  They said “an actual crime hasn’t been committed, just an attempt at one.”

I don’t want the moral of the story here to be, “This is all pointless, nobody does anything about it.”

If enough people report acts like this to RECO, TRREB, or even your local police department, I have to think it’s going to help.  Eventually.

But every day there’s a new scammer with a new scam.

And with so few repercussions for those who do get caught, there’s no real disincentive to trying.

That article in the Financial Post has a catchy headline but half of the text is stats about rental prices and why the rental market is hot, which is just filler for an article that doesn’t dig much past the headline.  I wish there was more media attention on this because the fraud is rampant out there and scams are getting more and more sophisticated.

Years ago, I would argue, “The scams don’t happen when you list with a licensed Realtor.  Scammers don’t want to deal with us; they want to deal with the landlord or tenant directly, so they go through Craigslist or Kijiji.”

I can’t say that anymore, as evidenced by the story about Tristan and Vik.  And yes, those are both of their real names.

Every landlord and tenant out there thinks, “It can’t happen to me.”

It shouldn’t.  But that doesn’t mean it can’t.

Be careful out there, folks!