Internet security expert Robert Siciliano learned firsthand about vacation rental scams when properties he owned started popping up on Craigslist at cut-rate prices.
"People in droves showed up at our door," trying to rent the vacation unit and long-term rental apartment he owns in the Boston area, recalls Siciliano, an online security expert for McAfee.
He tracked down the ads. "It's shocking to see your own words with your own photos," he says of the ads he didn't place. In some cases his contact information was still included in the ads.
What Siciliano experienced is far from unique. The Internet Crime Complaint Center (IC3), run by the FBI and the National White Collar Crime Center, reports in its "2012 Internet Crime Report" that real estate fraud -- which includes rental scams -- was one of the most frequently reported types of fraud in 2012.
The IC3 received more than 14,500 real estate fraud complaints that year. Of that total, more than half -- 8,700 -- were rental scams. The volume of rental scams the center received has shown a steep increase, from more than 6,000 in 2010 to 7,200 in 2011.
In a typical rental scam, which can involve vacation properties or longer-term rentals, the scammers will lift a legitimate ad from Craigslist or another Internet site, attract attention by giving the house, condo or apartment a bargain-basement price, include a fake email address, and then ask prospective renters to wire money or send a prepaid debit card for a security deposit.
In many cases, the victims will be asked to transfer the money overseas, according to the IC3 report.
Bonus gift: ID theft
Along with getting their hands on victims' cash, in some cases the scammer tells the would-be renter that a credit check is needed, so the victim sends his Social Security number, credit history and work history, the IC3 reports. That information is then used to commit identity theft.
"Consumers can get a double or even a triple whammy" if they're taken in by a rental scam, says Eva Velasquez, president of the Identity Theft Resource Center.
The scammers may first ask for your personal information to run a credit check, then say you're approved and ask you to send a security deposit and payment for the entire rental period.
When the unsuspecting traveler turns up at the vacation rental property, he finds it already occupied and suddenly has to find other accommodations, says Velasquez. She saw it all while previously working in the white-collar crime division in the San Diego County District Attorney's Office and as vice president of operations at the Better Business Bureau of San Diego and Imperial counties.
If the scammers have your name, address, date of birth and Social Security number, "they can wreak havoc," she says. They may open new credit cards in your name or access your social media profiles and try to figure out passwords for your bank accounts.
"You really need to do your homework on the business you believe you're dealing with," says Velasquez, who recommends checking the rental company with the Better Business Bureau or on Angie's List.
Red flags should go up if you're asked to use a wire transfer or prepaid debit card to make your deposit, says John Breyault, a vice president at the National Consumers League. He recommends finding a place through a vacation rental agency so you can use a credit card or debit card to put down a deposit. That gives you leverage to dispute the charges if you discover fraud.
By finding a place on Craigslist, "you're really at the mercy of the honesty of the person posting the ad," Breyault warns.
Rick Fisher, a travel industry consultant who was a pioneer in the vacation rental industry in the 1980s, says if you book your vacation rental through a professional management company you'll also have someone onsite to deal with problems that might crop up, such as air conditioning that isn't working or a broken stove. "The last thing they (vacationers) need is a problem on the other end."
Fisher recommends checking with the tourism bureau or chamber of commerce at the location you plan to visit to find reliable vacation rental companies.
Tom Gilmore, CEO of VacationHomeRentals.com , which he founded in 2004, includes owner-listed vacation rentals, but each site is vetted by his staff before it's included on the site, and vacationers can post reviews of the places they've rented.
Another place to look for reviews of vacation rental properties is TripAdvisor.com .
If you can't find any reviews of the property you're considering renting, "you're definitely rolling the dice," Gilmore says.
If you find a property that seems too good to be true -- such as a five-bedroom condo in Manhattan for $100 a night -- it probably is, he says.
Victim fights back
Siciliano, who uses both Craigslist and real estate companies to find renters for his properties, reported the fake ads to Craigslist. They were immediately taken down, but the scammers repost them again and again. "They're ruthless."
While there's no way to prevent having your rental ads swiped, Siciliano has set up alerts on his computer and smartphone that notify him if ads appear on Craigslist with his contact information and certain keywords. When that happens, he asks Craigslist to remove the ads.
While that won't stop scammers, his ads become less desirable to them. "They spend the time to repost the ads and they're taken down two hours later," he says.
"The bad guys generally go after the path of least resistance," preferring to target property owners who don't realize their ads have been swiped, Siciliano says. "Security is about becoming a tougher target."
If you're a victim of a rental scam, you can report it at Fraud.org, run by the National Consumers League, which shares the report with more than 90 law enforcement agencies, Breyault says. You should also file a complaint with the Federal Trade Commission at ftc.gov .
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