Don’t Get Burned by Rental Listing Scammers

The real estate market in California is hot and some people searching for apartments and home rentals are getting burned by purchasing useless rental listings.

Crooks are ready to take advantage of the unwary by selling listings of rentals that either aren’t available, don’t exist or are in foreclosure.

The California Bureau of Real Estate (CalBRE) warns consumers not to become a victim of such scams, which are most prevalent in areas where affordable rental housing is difficult to find.

A prepaid rental listing service is a business that supplies people with lists of residential properties for rent. The prospective tenants are required to pay a fee in advance or at the time the listing is provided. This business requires a prepaid rental listing service (PRLS) license from the Bureau of Real Estate or the person running the business must be licensed with the bureau as a real estate broker.

Wayne Bell, Real Estate Commissioner and CalBRE chief officer, says that consumers must be careful when using PRLS companies and offers this information to help you avoid problems.

Red Flags

  • The PRLS company only accepts cash (because credit cards allow for disputing charges).
  • The PRLS company guarantees the prospective tenant will get a rental in his or her price range, as well as a desired location, along with other positive options (such as allowing pets).
  • The list of rentals is handwritten and not computer generated.
  • The company does not provide property management or owner contact information for a prospective renter to schedule an appointment to visit the property.
  • The company asks the consumer to contact them instead of the property manager or owner if there is an interest. Typically, a PRLS company will provide you rental property addresses and property manager or owner information so that direct contact can be made by the client.
  • Company representatives use only first names. Note: Last names may be omitted and first names are often changed to avoid detection by law enforcement or to keep from being sued.
  • The company has only been in business for a brief period of time. Some PRLS companies open, quickly close, and move around a lot to avoid customers seeking refunds.

Avoid Being a Victim

  • Check the real estate and/or PRLS license HERE. And please note that there are very few PRLS licensees statewide. The list of such licensees can be viewed HERE.  Companies operating lawfully under a PRLS license must maintain a $10,000 bond or cash deposit.  Scammers will just take your money and there is no recourse.
  • If the PRLS company is not licensed, consumers should not use that company and should report the company to CalBRE.
  • If licensed, also check the PRLS with the local Better Business Bureau.
  • Do a Google, Yahoo or Yelp search on the Internet to see what others say about the company.

Read Your Contract with the PRLS Company

Protect yourself by reading your contract carefully. Before any PRLS company accepts a fee for rental listings it must provide a contract stating the amount of the fee and specify what services will be performed in exchange for the fee.

  • The contract must include a description of the kind of rental unit the consumer wants to find.
  • Even if the contract is signed electronically, consumers can and should still request a printed copy of the contract. This must be provided within five working days of a request.
  • Consumers need to be sure the contract states exactly what sort of rental listings will be provided. For instance, if a consumer is looking for a specific number of bedrooms, a maximum rent amount or listings in a specific area, this must be written into the contract.
  • The contract must state an expiration date of no more than 90 days from the date it is signed.
  • The PRLS company must also disclose small claims court remedies available to you should any issues arise.
  • If the PRLS company fails to provide the specified features, this is one of several conditions that would form a basis for the customer to receive a refund.
  • Prospective renters using a PRLS must carefully review the refund section of the contract. It is important to understand what rights you have should a refund be requested.

If you feel you have been the victim of a prepaid rental listing service licensee, please file a complaint HERE.  And if you have been victimized by an unlicensed scammer, CalBRE wants to know.  Contact them at 1-877-373-4542.

Sources:

Consumer Fraud Alert and Warning – Prepaid Rental Listing Services (PRLS)

Consumer Alert: Warning Regarding Online Rental Schemes

Prepaid Rental Listing Service…or Prepaid Rental Listing Scam?

shutterstock_164228687Searching for a rental home or apartment can be a daunting and time-consuming task. So to save time and energy, you decide to have a company take care of the search for you. You do some quick online research, and then tell the prepaid rental listing service (PRLS) company representative what you are looking for in a rental, pay them a fee for a list of rentals matching your criteria, and find that dream rental in no time.

Sounds easy enough. The problem? There is more to the PRLS business than meets the eye, and scams are common. To avoid getting scammed and to get in the door of the rental you’ve been looking for, consumer education is the key.

Watch for red flags
Unfortunately, not all PRLS businesses are on the up and up. Here are some common problems and scams to be aware of:
✔Unlicensed companies
✔False advertising
✔Lists of rentals that are not available as advertised
✔Lists contain properties that are not for rent or do not exist
✔Lists do not meet a consumer’s requested specifications
✔Failure to provide refunds

Before handing your money over to a PRLS company, it’s best to understand whom and what you’re dealing with. A PRLS provides prospective tenants with listings of residential real property for tenancy while collecting a fee at the same time or in advance of when the listings are supplied. In order to legally conduct business in California as a PRLS, the company must be licensed by DCA’s California Bureau of Real Estate (CalBRE). Always check the license to verify the company you’re dealing with is in good standing. If the company is not licensed, do not conduct business with them!

Look before you sign
Before any PRLS company accepts a fee for rental listings, it must provide you a written contract that includes detailed information, including:
✔The amount of the service fee
✔A description of the services to be performed in exchange for the fee
✔Specifications for the rental unit that you want the service to find for you
✔The expiration date of the contract, which is no more than 90 days from the date it is signed
✔The small claims court remedy available should any issues arise

If you have a problem with a PRLS company, you may not be able to recover all of your money or time, but you do have rights and should fully understand them. Keep in mind it is always good consumer practice to do research before conducting business with any company. Ask friends and family you trust for recommendations of companies they have had good experiences with. It is also a good idea to research the company online and check with the Better Business Bureau.

Refunds
You are entitled to a full refund if you have not received within five days of signing the contract three available rental listings that meet the property specifications listed on the contract. You are entitled to all fees you paid, minus $50, if the service does not locate a rental for you or if you find housing on your own within the timeframe of the PRLS contract. You will have to provide documentation in order to receive a refund. If the service failed to locate a rental property for you, you will need to provide documentation proving that you have not moved and still reside at the same address. If you found a rental on your own (without the assistance of the PRLS), you will need to provide documentation of your new address. If documentation cannot be provided, a statement of the facts should be prepared and submitted to the PRLS company. If the PRLS company does not issue a refund, a court of law can award you the refund, plus additional damages, up to $1,000 (Business and Professions Code section 10167.95). The quickest way to obtain a judgment in these cases is through small claims court.

The mission of CalBRE is to safeguard and promote the public interests in real estate matters through licensure, regulation, education, and enforcement. To check a license, file a complaint, report unlicensed activity, or for more information about PRLS, visit http://www.calbre.ca.gov or call (877) 373-4542.

Additional Resources
Prepaid Rental Listing Service Information

Prepaid Rental Listing Service Consumer Alert

List of unlicensed PRLS companies that have been issued orders to desist and refrain from engaging in further prepaid rental listing service activities

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This Just In: The Latest Edition Of Consumer Connection Is Here!

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The latest edition of the Consumer Connection magazine is now available! This edition of our magazine features:

  • Pill…or candy?
  • Protecting against HVAC service fraud
  • E-cigarettes: Helpful or harmful?
  • Reimbursement help after school closures
  • Stronger security with credit card chips
  • New vehicle smog check test

The Consumer Connection magazine is full of informative and fun to read articles. Share what you read and help others become more informed. Check out the magazine HERE.