We have frequently discussed the dangers of wire fraud during home sales, but we have rarely covered similar risks for renters. It might not surprise you that rental fraud is every bit as deceptive as wire fraud is for property sales. Sometimes, the methods can be extremely primitive. Let us look at one particular example from the Bay Area – the case of Mercedes Gonzales.
Bilking Would-Be Renters
Mercedes Gonzales is a 25-year-old woman from California who recently posed as a rental agent under a false name on social forums like Facebook. Gonzales was able to post rental advertisements for properties, prepare fictitious rental agreements, and collect deposits.
The only problem was that Gonzales had no ownership of the properties and no right to act as an agent for the rentals. Nonetheless, Gonzales showed up in person outside of these properties, giving would-be renters a “tour” of the outside of the structure.
Even though none of the applicants was able to look at a property from the inside (a major red flag), some 23 signed Gonzales’ bogus rental agreements and handed over deposits. In one reported case, the deposit was $1,500 from a family that was looking for a larger place in which to stay. Gonzales is now in custody on $540,000 bail.
How to Stay Away From Rental Fraud
It is important never to agree to rent a home that you have not inspected inside and out. In fact, you should never give your trust to an agent who cannot grant you access to a property. Beyond this, it is vital to look carefully at the rental document process. Gonzales’ documents were fabricated. Moreover, she offered no receipt of funds received, an obvious giveaway.
Rental fraud is not the only problem in real estate. A large amount of money is lost each year through wire fraud during real estate transactions. In these cases, fraudsters pose as agents through emails.
Propy protects its users by bringing all communications into the Propy system; the transaction platform secures each step with blockchain recordability. It is an elegant technology system that keeps bad actors locked out of the process.