Renters targeted by scammers on SpareRoom and Facebook
Renters are being targeted by scammers on SpareRoom and Facebook as prices soar and property listings dwindle.
A combination of landlords selling up and renters migrating back to cities has created a perfect storm in the rental market, and fraudsters have been quick to take advantage.
Action Fraud received more than 6,000 reports of online rental scams in the year to December 2022, with victims losing more than £10 million.
Here, we look at why the cost of renting is rising and offer advice on how to stay safe from scams.
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What's happening to the rental market?
Price hikes, bidding wars and online scams are becoming commonplace in the rental market, as demand increasingly outstrips supply.
The average rent for a newly listed property in the UK rose by 9.7% in 2022, according to Rightmove. Average asking rents hit a new record of of £1,172 per month outside London, and an eye-watering £2,480 in the capital.
Rising rents have been driven by a surge in demand since the pandemic, combined with a shortage of rental homes. A growing number of landlords are selling up, citing tax changes, higher mortgage rates and new energy efficiency requirements.
Currently, rental properties must have an Energy Performance Certificate (EPC) rating of E, but all new tenancies in England and Wales will be required to have a rating of C by 2025, with existing tenancies following suit by 2028. The mortgage lender Paragon Bank estimates the average cost of upgrading properties will be £10,560, with high penalties for those who don't comply.
Landlords also face a reduction in their capital gains tax allowance from £12,300 to £6,000 in the 2023-24 tax year, and to £3,000 from April 2024. This could result in more investors leaving the market sooner than expected.
Scammers cash in on chaos
Refreshing Rightmove and Zoopla in the hope of a suitable property appearing can feel futile in the current market.
If your tenancy is about to end, or you can't afford a rent hike, chances are you'll also be looking at listings on websites such as SpareRoom, Facebook and Gumtree.
Landlords and tenants use these platforms to advertise available rooms in flat shares, as well as whole properties for rent. But while they can be useful to help expand your search, these sites each take a different approach when it comes to verifying the legitimacy of users and vetting posts.
Worryingly, Which? has found examples of rental scams circulating on both SpareRoom and Facebook.
- Find out more: what to ask when renting a home
SpareRoom 'fake Airbnb' scam
The first fraudulent listing we found on SpareRoom – a popular flat-sharing platform with more than 12 million registered users – initially didn't seem suspicious. The post had professional photographs and the price, though towards the lower end of the market, didn't seem too good to be true.
But when we messaged the user to arrange a viewing, they immediately started applying pressure tactics, telling us that someone was about to put down a deposit before even viewing the property. The scammer then asked for our phone number in case the deal didn't go through.
We then received a message from the fraudster on WhatsApp. They told us they couldn't arrange a viewing as they were in Leeds with their young children after their partner had passed away. They could, however, rent us the property immediately through Airbnb. The scammer then asked for our full name and address so they could send us a link to the Airbnb listing.
The use of pressure tactics and the insistence that we rented through Airbnb appeared suspicious, so we immediately reported the listing to SpareRoom.
We later found the photos used on the fraudulent SpareRoom ad on a legitimate estate agent's website.
- Read more: what to do if you can't pay your rent
How the scam works
We blocked the scammer on WhatsApp before they could send us a link. SpareRoom explains how this scam works on its website.
The scammer sends a fake link to the property that looks exactly like the genuine Airbnb website. The fake listing will include instructions on how to proceed with the payment, which is usually a direct bank transfer to an international bank account.
You might then be asked for further payments, with the scammer reassuring you that you'll get a refund. But when you’re finally about to move into the property, the advertiser will have disappeared from the app.
If you fall victim to this kind of fraud, take a look at our guide on how to get your money back after a scam.
‘I was asked to pay a deposit to view a property’
We spoke with another SpareRoom user who was asked to transfer money just to view a property.
'The scammer replied to my message on SpareRoom asking me to arrange a viewing via WhatsApp,' they told us. 'They then said I'd need to pay a refundable security deposit to secure the property before I could even view it.
'They said the deposit would be refunded immediately if I didn't want to take the property after viewing it, but I suspected it was a scam as soon as they asked me to send money.'
Under the Tenant Fees Act, it's against the law for landlords or property agents to ask for deposits or charge fees for viewings.
They reported the listing on SpareRoom and received confirmation the following day that the user's account couldn't be verified and had been deactivated.
SpareRoom told us both of these ads were live for a short amount of time before being suspended and then permanently removed. Anyone who had been in contact with these advertisers was quickly sent a warning to stop all communication. SpareRoom said no money was lost in either of these scam attempts.
- Read more: how to spot a scam
'My house was listed for rent on Facebook'
Facebook is another platform used by landlords and tenants to advertise rental listings.
There are Facebook groups advertising rental homes in specific areas, but you can also find listings for properties on Facebook Marketplace, which is where Sean (not his real name) came across a rental scam.
'It was around the time our house went up for sale with Purplebricks,' Sean told us. 'Someone knocked on our door, out of the blue, asking if they could view the rental property. This rang alarm bells, as our house was up for sale, not for rent, and we had no idea about the viewing.'
Alarmingly, Sean's son then came across a listing for a rental property on Facebook Marketplace that used the photos of their home from the Purplebricks listing and included their full address.
The scammer claimed to be promoting the property on behalf of the owners, advising people to message them so they could put them in contact with the owners.
Both Sean and his son contacted the scammer, urging them to remove the post, but the scammer blocked both of their accounts.
Sean's son reported the post to Facebook but weeks later, it was still live. 'I don't feel Facebook acted with urgency to remove the post,' Sean told us.
Facebook has since removed the fraudulent post.
- Find out more: report a scam to warn others
What are platforms doing to stop scams?
We asked SpareRoom, Facebook and Gumtree what they're doing to prevent these types of scams, and what you can do if you come across a suspicious listing.
SpareRoom
SpareRoom told us it has anti-fraud systems in place, and moderators who review adverts. It investigates reports and takes action when needed, such as banning users.
If a user is banned, the company issues warnings to every other user who has been in contact with them. In complex cases, where the investigation takes longer, it will suspend the user’s account and alert those who have been in touch. It then sends a follow up email once it has concluded the investigation.
It also offers a verification service, by which users can have their ID verified. Those who pass will automatically have the verification tick displayed on their adverts.
Agents that list properties need to complete due diligence checks, including checking Property Redress Scheme registration details.
You can report ads directly from the ad itself, or via the SpareRoom app messaging system.
Facebook told us it invests heavily in technology and staff to remove scammers from its platform.
It encourages users to report suspicious activity to Facebook and to the police.
It says it works closely with Stop Scams UK to help victims and remove scams at the source.
Gumtree
Gumtree doesn’t require private landlords to undertake verification checks, but says its adverts go through a 'rigorous system of rules and filters to identify and remove suspicious ads'.
It urges anyone who’s seen a scam to report it via the ‘Report this ad’ button. Once an ad is reported, the company says it will investigate and take necessary action. This could include removing adverts and blocking users. It moderates private messages for fraudulent and suspicious activity, as well as for inappropriate language.
Gumtree told us that in 2022, it removed 2,844 ads for flats or houses to rent, accounting for 0.9% of total listings in its property category. The majority of these ads were removed before they appeared on the platform.
How to avoid a rental scam
Here are some of the tell-tale signs of rental fraud to keep in mind if you're looking for a new place.
- Don’t transfer money or share bank details before viewing a property. It's unlawful for landlords to ask you to pay to view a property. If someone asks you to do so, report the listing and user immediately. If you've viewed a property and want to go ahead with it, make sure you've checked it's legitimate and are happy with the contract before transferring any money.
- Too good to be true? Scams will often promise high returns for very little financial commitment. If the rental price seems too good to be true, it probably is. Use your common sense with any listings that are significantly cheaper than others.
- Don’t be pressured into making a decision. Scammers often use pressure tactics to make victims act quickly and without thinking. If a prospective landlord is pushing you into transferring money or sending over personal information, take a step back and check the listing is legitimate before acting.
- Reverse image search. Two of the scams we came across stole images from legitimate listings on estate agents' websites. If you're suspicious of a property ad, it's worth running a reverse image search in Google to see if the photos have been stolen from elsewhere.
- Try to keep your messages on the platform where you've found the listing. In both of the SpareRoom scams we've seen, the scammer was keen to move the conversation off SpareRoom's platform and onto WhatsApp. Try to keep your conversation on the platform where the listing was posted if you can, and only hand over personal data if you're confident the user is legitimate.
- Don't click on links. Be wary of clicking on any links before checking they're genuine. Most websites will have a list of the different links and domains they use - if you're unsure, it's worth double checking the URL is legitimate before clicking on it.
- Check you're dealing with a genuine landlord. You can search and verify landlord details for free on RentProfile, a service set up to protect tenants from fraudsters posing as landlords. If a landlord isn't listed, you can invite the landlord to sign up, or request a landlord background check for a small fee.
