People posing as legitimate landlords steal upwards of $400,000 from hundreds of different victims in Canada each year, and that number has been on the rise during the pandemic.
This year, Sackville resident Virginie Closson was one of those many victims.
Closson told her story to CHMA as a cautionary tale, to help prevent the same thing from happening to others.
Virginie Closson had been in search for a new place to live for a couple of months when someone suggested she try Kijiji. There was simply nothing being posted in places like the Sackville NB renters Facebook group, of which she is still a member, says Closson.
“Everything was booked solid,” she says. “There were no places available.“
So Closson posted an ad on Kijiji that she was looking for a place to live.
“Within that same day,” says Closson, “I got like five or six rentals all from Sackville. And I was like, oh, they’re coming out of the woodwork.”
Closson was desperate after two months of looking on Facebook and not finding anything. She walked by addresses mentioned by two people who had contacted her as a result of her Kijiji ad.
“One of them was a apartment complex, and the other one was a house just down the street,” says Closson. “And so it looked real.”
Closson pursued the house, but soon found out her potential new landlord didn’t live in town.
The person told Closson they lived in Prince Edward Island with their sick mother-in-law and that they couldn’t come to Sackville, but they could ship the key and the house documents. “And so it looked all legitimate,” says Closson. “I filled out the paperwork and emailed it back to them, but without the money yet.”
After considering the factors involved, such as a pandemic preventing people from meeting in person, and the fact that her potential landlord was living in another province, Closson decided to go through with the rental.
“I was thinking okay, well, it’s a legitimate person. So I sent them the the money through e- transfer.”
Closson almost immediately started to regret her decision when the person asked her to confirm the password for the e-transfer, and then asked for screencaps of the e-transfer receipt on her phone.
Then, after quickly accepting the e-transfer, the person contacted Closson to say the keys and documents would be in the courier to her in the morning.
“They said I could move in by November 1st,” says Closson. “Then the next day I got a text from them. They said, sorry, the courier won’t let me send this unless I have insurance to cover it. And I need another $700.”
Closson had already sent the person $1100, to cover the first month of rent and a damage deposit. She didn’t have any more money, even if she wanted to send more.
The person told her that the $700 was a refundable deposit required by the courier. Closson messaged back to say that if it was refundable, why couldn’t the landlord cover it?
“And I said, I’m sorry, but I don’t have the money. And I’m starting to worry that maybe you’re a scammer,” says Closson. “And they were like, no, how could you say that, I’m so offended that you would be suspicious of me. I know how hard it is. People work for their money, and it’s really hard earned. And I would never dream of scamming you from any money. This is a real thing.”
The person kept trying to convince Closson to send more money, telling her she was getting good value, and that the deal might fall through if she didn’t send more money in time. But Closson was suspicious, and broke.
Closson asked for her money back, telling the person, “I really don’t feel comfortable with this all of a sudden.”
The person refused. “They were like, we can’t refund it. And I said, What do you mean? If you’re the landlord, you can just re-transfer me my money.”
The person told her, “the key and the house documents are already with the courier and they’re just waiting for your money. It’s just $700. It’s just a little bit. It’s not that much more money.”
Closson says she knew then she had lost her $1100.
She reported the fraud to the police, and at the advice of a friend, called her bank to see if they could retrieve her money. Her bank, Tangerine, told her there was nothing they could do.
Closson is now telling her story to help alert others to the dangers of dealing online with potential landlords.
Closson now says her fraud is “water under the bridge”.
“I wasn’t raised to be to be a scammer,” says Closson. “Maybe I’m a little naive when it comes to that, but I’m just kind of assuming that everybody else is just as honest as I am.”
Her advice for others who, like her, are looking for homes in such a tight rental market, “maybe be a little more savvy and unassuming about what you’re looking for.”
RENTAL SCAMS ON THE RISE IN 2020
According to stats from the Canadian Anti-Fraud centre, there are over 500 rental scam reports each year in Canada. In 2020, that number is on track to hit close to 700. And the number of people victimized by scammers could hit over 400.
And those numbers represent only a tiny portion (about 5%) of cases where people have been defrauded.
“We’re seeing it across the board,” says Jeff Thomson of the Canadian Anti-Fraud Centre. “It’s not just rental scams. It’s merchandise scams, puppy scams, loan scams, job scams… We’re kind of seeing that across the board. Definitely fraud is up. And certainly the pandemic’s playing a role with that.”
E-TRANSFERS ARE NOT TRACEABLE
Lisanne Roy Beauchamp is an operations supervisor with the Anti-Fraud Centre. Beauchamp says that when using the Interac e-transfer system through a bank, it’s unlikely that victims of fraud will retrieve their funds. “Fraudsters will use every payment method at their disposal to collect money,” she says. “In the last two years, email money transfers can be found in the top 5 payment methods requested by fraudsters.”
When Virginie Closson first called her bank, Tangerine, to see if they could help, they told her there was nothing they could do to help trace or retrieve her funds. When CHMA contacted Tangerine, spokesperson Sarah Nazzarro said the bank “review[s] and investigate[s] all fraud-related claims and invest[s] extensively in fraud detection, prevention and public awareness measures to protect Clients.”
Nazzarro says that the bank has been in touch with Closson, but nearly a month later, Closson has not heard back from the Tangerine.
Adrienne Vaughan, a communications manager for Interac Corp., confirmed by email that e-transfers do not have traceability or fraud protection. “Sending an Interac e-Transfer is similar to sending cash and should only be used to send funds to trusted individuals,” writes Vaughan, “as once the transfer is deposited, it cannot be reversed.”
Vaughan adds that auto-deposit offers a bit more security, or at least certainty. When sending money to someone registered for auto-deposit, there are two chances to see the legal name of the person to whom you are sending funds. Registration for auto-deposit means that an email address or phone number has been pre-authenticated, says Vaughan, and tied to a specific bank account. Users can see the legal name of the person on the receiving end of their transfer when they are setting it up, and during the confirmation before the transfer is sent.
Beauchamp says that tracing fraudulent payments through the banking system can be tough, because the schemes can be complex, sometimes involving people who don’t even know they are helping defraud someone else.
HOW TO AVOID RENTAL SCAMS
“Rental scams have been around for a while,” says Thomson. “Basically fraudsters create fake fake ads on classified sites like Kijiji, Craigslist, or even some of the known rental websites. In many cases, they’ll steal ads from other other applications, they’ll capture the pictures and will use the same pictures. So in a lot of cases, it may be difficult to to identify these things.”
Thomson suggests that people looking online for rentals do an extensive search, including an image search, to make sure there are not duplicate posts. He also says to watch out for rental prices that are below average market value. “In a lot of cases with rental scams, the offer is a very good deal,” says Thomson, which, “might be another indicator of a potential fraud.”
He also advises physically visiting the property. This wouldn’t have helped in Virginie Closson’s case, as she did walk by the house offered by her scammer. It’s also not always possible to visit properties when moving from another town or province. Thomson suggest people, “reach out to maybe a real estate agent, or somebody you might know, anybody to visit the property before you make your payment,” he says.
Requesting a lease agreement (again, something that Virginie Closson did) before paying anything is also key, he says, though he acknowledges that lease templates are easy to find online.
“At the end of the day, I think the key is not to send money to strangers,” says Thomson.
WHAT TO DO IF YOU’RE A VICTIM OF FRAUD
The Canadian Anti-Fraud Centre has a handy guide to what to do if you think you may have been defrauded.
Step one is to remain calm, and gather all information about the fraud, including documents, receipts, and copies of emails and/or text messages.
Next, they recommend reporting the fraud to your financial institutions, to the police, and to the Canadian Anti-Fraud Centre. You can call the Centre toll free at 1-888-495-8501 or report online through their Fraud Reporting System.
Finally, the centre advises protecting yourself from future fraud by never sending “recovery money”.
“Scammers often target victims of fraud a second or third time with the promise of recovering money,” reads the Centre website.
Last but not least, the Centre asks that you, “tell family, friends, neighbours and co-workers about your experience. You may prevent someone else from becoming a victim.”