How can you avoid rental scams?

What are rental scams?

Rental scams use various tactics to extract money from tenants. Every year, the Canadian Anti-Fraud Centre receives hundreds of reports of rental scams. In reality, the number of victims could be much higher. Losses are usually equivalent to one or two months’ rent, which can amount to several hundred or sometimes thousands of dollars. 

What are the tactics used in rental scams?

Whether you’re already a tenant or still looking for a place to live, these scams could affect you. Here’s how to recognize the three most common tactics:

Fake online ads

Let’s say you found an apartment to rent on social media or a classified site – the only problem is the accommodation doesn’t actually exist or the person who posted it isn’t actually the owner. This person will use all sorts of excuses to get you to make a bank transfer:  they live abroad, they’ve had bad experiences with potential renters in the past, they require a deposit to guarantee a visit or to cover the first month’s rent, etc. In the end, you’ll lose your money and the prospect of a new home. 

Rent payment scams

You could be the victim of a rental scam even if you’re not looking for a new apartment. For example, you might receive an email from someone pretending to be your landlord who tells you to pay your rent using a new payment method, such as Interac e-Transfer®. Or you might receive a message informing you that a property management company is now responsible for managing your building and you’ll need to pay them directly. If you take the bait, you’ll end up paying your rent twice.

Roommate scams

Have you placed an ad to find a roommate? Be wary if someone says they’re interested – and even sends you a cheque – without having first visited the apartment (they may say they’re currently abroad, for example). You’ll then notice that the cheque amount far exceeds the rent, so the person asks you to reimburse the difference by bank transfer  – only thing is, the cheque is fake. You’ll end up losing your money, plus you still won’t have a roommate. 

What are the signs of a rental scam?

Fake rental listings are often too good to be true: the apartment is beautifully renovated, the rent is below market value and the conditions are very attractive. This type of rental scam also plays on a sense of urgency, for example, the owner needs to leave the country immediately or other tenants are waiting to sign the lease. A good rule of thumb is to never make a hasty decision.

Here are a few precautions that could help you dodge these traps:

Check if the apartment actually exists

If the person who posted the rental listing fails to give you the apartment’s address, it may not be real. And even if they do give it to you, it’s still not a guarantee. Check out the location on a site such as Google Maps. Use the Street View function to examine the building and make sure its architecture (doors, windows, balcony, etc.) matches the photos in the ad.

Then type the address of the apartment into a search engine along with the name, phone number and/or email address of the person claiming to be the property owner. You may find comments from people online who’ve been victims of similar scams.

Stick to phone calls

Whether it’s an apartment for rent or a room in a shared apartment, call the person concerned rather than responding in writing. If they can only be reached by email or text message, it’s a bad sign.

The same rule applies if you receive a message concerning the payment of your rent by bank transfer. Call your landlord or property manager directly to confirm the new procedure.

See the property in person

Make sure you visit the apartment that’s available and not a neighbouring or similar rental unit. If you run into people from the neighbourhood, ask them if the apartment is indeed available and if they know the person showing it to you.

Don’t share any sensitive personal information

It’s possible that the person renting out the apartment will want to perform a credit check before a lease is signed. They may request personal information such as your address and current landlord’s contact details. They may even ask to see proof of identity (however, they’re not allowed to keep a copy or photo of this). Under no circumstances should you disclose your banking details or social insurance number.

Don’t send a bank transfer before signing the lease

Be wary if you’re asked to pay a deposit to reserve the apartment. Security deposits are illegal in Quebec, though they’re permissible in some provinces. Still, there are limits. In Alberta for example, they can’t exceed the amount of the rent, and in British Columbia, they can’t exceed half of the rent. You may, however, be asked to pay the first month’s rent in advance. In either case, don’t make a bank transfer before signing the lease agreement.

→ Check out this advice from the Government of Canada (external link) or visit your province’s website to see what your rights and obligations are as a tenant.

What should you do if you’re the victim of a rental scam?

No one is immune to rental scams. If you fall into a scammer’s trap, stay calm and take the following steps:

• Notify the website  responsible for the fraudulent advertisement.
• Report the incident to the Canadian Anti-Fraud Centre. (external link)
• File a complaint with your local police station.
• Immediately inform your financial institution in the event of bank fraud or identity theft.

→  Check out our article on the six steps to follow in the event of identity theft

For more advice, tools and articles about fraud, visit our Fraud Prevention page.