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Friday, January 2, 2009

Rent Scam Where Check Covers Rent In Full

Question: I have recently posted a home for rent on Craigslist and have received several requests from emails claiming to be out of the country and they are ready to rent sight unseen. When I insist they fill out an application they do not respond. Initially they were offering to mail me a check to cover rent in full. How does this scam work. I cannot figure out how they can be scamming when they are only asking for my name and address to mail me a check? Have you heard of this?


This is a variation of the Nigerian 4-1-9 scam. Here is what will happen: The renters will send you a cashier's check for the full amount, and may even overpay. Then, they will want you to wire-transfer some of the money back or remit their overpayment. You will wire them money, and only 30 days later find out that the cashier's check is bogus. You will then go to your bank to try to get the wire-transfer reversed, only to find out (1) the bank cannot do it and you, and not the bank, are responsible for your loss; and (2) authorities outside the U.S. don't care that you've been scammed.

This is a very common scam, often run with the sale of automobiles. Same thing: Scammers send a cashier's check that overpays for your clunker, you wire the difference back, and then find out that the cashier's check is bogus.

Anytime somebody outside the country offers you a payment for something, be very suspicious because it is more likely a scam than anything real.

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At January 7, 2009 9:40 AM , Blogger Arthur Rubin said...

This can combine "nicely" with state laws which may limit the amount of "unearned" rent you can keep. California, for instance, doesn't allow you to keep more than 2 months' rent for an unfurnished unit and 3 months' rent for a furnished unit. This doesn't "work" quite as well (for the scammer) if you are writing a long-term lease, rather than a simple month-to-month rental.

At January 7, 2009 9:49 AM , Blogger Arthur Rubin said...

... and I've been a landlord and tenant in California,so I've had to research the laws.

And I was scammed by a tenant, in a more traditional manner; we gave 45 days notice of intent to move back in, and the tenant stopped paying, claiming we told them that their initial payment was "first and last months' rent", rather than being in the nature of a security deposit. And they left the place such a mess that it cost more than 3 months' rent to bring it up to basic levels of habitability and safety. Needless to say, the tenants didn't leave a forwarding address, even with the post office.


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