{"id":2802,"date":"2022-10-13T18:16:40","date_gmt":"2022-10-13T22:16:40","guid":{"rendered":"https:\/\/canadianlending.ca\/brokers\/?p=2802"},"modified":"2023-05-17T16:35:15","modified_gmt":"2023-05-17T20:35:15","slug":"borrower-beware-part-i-protecting-clients-from-rental-scams","status":"publish","type":"post","link":"https:\/\/staging.canadianlending.ca\/brokers\/borrower-beware-part-i-protecting-clients-from-rental-scams\/","title":{"rendered":"Borrower Beware, Part 1 \u2013 Protecting clients from rental scams"},"content":{"rendered":"

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In this first instalment of Borrower Beware, CMI looks at common rental scams, including red flags to watch for and valuable advice you can offer to help protect your clients.\u00a0<\/span><\/i><\/p>\n

In any broker\/client relationship, adding value beyond the scope of your standard services is a highly effective way to create loyalty, generate referrals and cultivate a pipeline of prospective clients. For mortgage brokers, this can include educating clients around other important personal finance matters. Creating awareness around potential financial scams is a good example.<\/span><\/p>\n

The volume of online fraud incidents in Canada is rising quickly. In 2021, there were 67,970 reported victims who lost over $381 million dollars, according to the Canadian Anti-Fraud Centre. As of July 2022 that amount was already sitting at more than $284 million for this year.\u00a0<\/span><\/p>\n

One widely known fraud scenario is in rental scams, where someone looking to rent a home or apartment ends up giving money to a fraudster instead of a landlord, and is out both the cash and a place to live.\u00a0<\/span><\/p>\n

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Spotting a rental scam<\/b><\/p>\n

In a typical rental scam, a fraudster entices interest in a property with a highly attractive rental listing and a low price. The fraudster posts ads on popular sites like Kijiji or Facebook and uses photos to make the listing look authentic. They may pose as a landlord and claim to be unable to meet to show the place in person. After a few emails or text messages, they ask for a security deposit, followed by advance payment on future months\u2019 rent in exchange for a discount. They often use high pressure tactics to secure the deal by saying that there is a high level of interest in the property. If the deal seems too good to be true and there is no attempt at tenant screening, alarm bells should go off.\u00a0<\/span><\/p>\n

The Canadian Anti-Fraud Centre classifies this type of scam as a merchandise or \u2018non-delivery\u2019 scam. In case after case, victims across Canada were looking to rent a home or apartment but fell victim instead. While this scam is not new, the incidence rate has increased significantly since the onset of the COVID-19 pandemic and social distancing, and further fuelled by the housing market surge of 2021. According to a recent report from Vancouver-based rental platform liv.rent, suspicious listings have tripled in the past year, and variations of the scam are emerging, as would-be renters try to protect themselves from previously known fraudulent tactics.\u00a0<\/span><\/p>\n

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Steps to protecting yourself<\/b><\/p>\n

An ounce of prevention is worth a pound of cure. Advise clients to take these steps, as recommended by Canada\u2019s Competition Bureau, to ensure a rental listing is legitimate:<\/span><\/p>\n