Financial Reflections

You’ve got a property to rent.  Maybe you’re a little desperate to get the place rented — you own two houses and need to rent one out, are trying to relocate, or keep your investment property out of foreclosure.  These days, all those situations are common.  That’s where the scammers step in.

Here’s how the scam works:

• A renter contacts a landlord via email.  That’s to be expected if you’ve listed your property online, but here’s where things change
  • Usually they don’t give a phone number.  That’s because they might not even be in the US.
  • They contact you from outside of the country.
  • There’s often a long sob story about their situation, to garner your sympathy and set you up for the unusual payment method.
  • They often have broken English, because they’re often outside your country.
• The overpay.  Here’s the kicker.  They offer to overpay you with a cashier’s check, or money order.  If you could just be so kind as to wire them the difference, they will be able to rent from you.  What a deal!
  • You cash the check or money order, and send them the difference.
  • They get the difference as a wire transfer, because the money is guaranteed.
  • You find out the check was bad later, the bank holds you responsible and you need to cover the whole cost.  You’re out the fee, lost time dealing with a false renter, possibly even turning good tenants away.

That’s how it works, and it’s more common than you might think.  So how can you avoid it?

• Deal with people locally.  People you can meet.
• Verify checks and money orders.  Wait until they clear.
• Never accept any check for over the amount.
• Wires.  Here’s how Craig’s List puts it: “NEVER WIRE FUNDS VIA WESTERN UNION, MONEYGRAM or any other wire service – anyone who asks you to do so is a scammer.”

How do I know this?  I used to work as the webmaster for a small rental site, so I’ve gotten an education on these things.

Looking to be the tenant instead of the landord?  See The Scam that hits renters.

Have you been hit by this or something like it?  Let me know in the comments below.