Rental scams have never been worse. Here's how to avoid them.

When we think of the term "catfish," we usually picture a dating-app disaster. But the word is now being used in an entirely different context: 'catfish homes'.

According to realestate.com.au, "Australia’s ongoing rental crisis has driven a dramatic rise in homes represented by inaccurate or digitally altered images designed to lure unsuspecting tenants into properties they wouldn’t otherwise want."

As if finding a place to rent wasn’t hard enough...

We decided we needed to understand more about these scams — and how not to be trapped by them — so we went in search of some expert advice. 

Here's what we found.

The most common rental scam people currently encounter is the "phantom rental", says Leanne Vale, who is the Chief of Financial Crimes and Cyber Resilience at COBA (Customer Owned Banking Association).

"This is when scammers create listings for properties that don't exist, using stolen photos," she told Mamamia. "Once you pay a deposit or bond, or share personal information, the scammers disappear.

"Another tactic involves hijacking legitimate rental listings from reputable websites or platforms and reposting them with altered contact information or photo," she added. "This diverts inquiries and payments to the scammer, so unsuspecting renters believe they're interacting with the real property owner or manager."

Big yikes.

"The theft of personal information through rental scams is another method used by criminals. Scammers often request sensitive documents, like passports or bank statements, under the guise of verifying your identity. This opens the door to further fraud including identify theft."

Watch: How long will the rental crisis last? And how can we fix it? Post continues below.

So how can you pick a rental scam?

If you're new to the property market, you're particularly vulnerable to these kinds of scams, especially in the digital age, explained Leanne. "Many rental scams originate on social media platforms. For a safer search, use reputable real estate apps or websites."

But while scammers gonna scam, there are a few red flags to look out for when looking for a new rental property, explained Leanne, that might indicate something dodgy could be going down. 

Look out for things like:

• An ad for a rental seems too good to be true. That is, the price is low, very little information is requested, and it's available for the exact time you want.
• Any duplicate ads for the same property, with different contact details, on a trusted real estate site.
• A 'landlord' using high-pressure tactics or a sense of urgency to get the renter to make immediate decisions or payments before they 'lose the property to someone else'.
• A landlord or property manager who is unavailable for in-person meetings or property viewings — whatever the reason, there will always be some excuse for them not to meet.
• Requests for funds to be sent via methods that are difficult to trace, such as wire transfers, prepaid cards, or cryptocurrency.
• A lack of documentation, with no formal rental agreements, no receipts for payment, or refusal to provide any verifiable information about the property or landlord.
• Payments that aren't receipted to a trust account or ledger.

Also, don't forget that bond payments are regulated, so you can always double check with your state regulators before transferring the bond, which is usually a pretty chunky sum.

How do I avoid getting scammed when looking for a rental?

It's crucial to be vigilant, says Leanne. Especially in the current competitive housing and rental market.

"Prioritise your safety by verifying the property and the credentials of the landlord or agent before proceeding," she told Mamamia. "Always inspect the property in person before making any financial commitments or sharing personal details."

And, how to do this exactly? Property Manager Damien Lake, from Raine & Horne real estate, shared his industry insights.

1. Verify the listing.

AKA, make sure it's a real property. 

"Look for inconsistencies in photos or descriptions," Damien said. "Use tools like Google's Reverse Image Search to see if images are taken from other sites." 

You can also verify the property's location using Google Earth, said Leanne, adding: "Be on the alert for inconsistencies, like if the views from windows seem unrealistic for the property's location and description. Research similar properties in the area to get a sense of typical features and pricing. If the description seems too good to be true, it probably is."

It is also vital to attend an inspection, ideally in person. And if you can't make it, request a live virtual tour.

2. Research the agent/landlord.

"Look up the agent or landlord's name and contact information online to see if they have an established professional presence," Damien told Mamamia. "Contact the real estate agency directly to confirm the agent's legitimacy."

If you’re still unsure, try to reach out to previous tenants to ask them about their experiences. 

We know, it's long and boring. But it's important. 

"Read the lease carefully, and look for vague terms or missing details like the address or landlord’s name," said Damien. "Compare the lease terms with local rental laws to ensure they comply. Consider having a legal professional review it if you're unsure."

4. Avoid upfront payments.

"Never pay a deposit, rent, bond or other fees before signing a lease and seeing the property in person," Damien said, as scammers often ask for money to secure a property that doesn't exist.

Also, "avoid making payments via wire transfers or methods that are difficult to trace."

5. Be aware of market rates.

It's might not be thrilling stuff to be across, but it's definitely worth researching average rental prices in the area to ensure the listing is reasonable. "Be sceptical of properties priced significantly below the market rate," Damien noted.

What to do if you think you've been scammed.

If you do fall victim to a scam, property lawyer Amanda Farmer says there are definitely steps to take.

"As soon as you've identified a scam, report it to the local police as well as ScamWatch, an Australian Federal Government organisation that collects reports about scams and helps to warn others," she said.

"If you've transferred money to a scammer, contact your bank and let them know, in case the transfer can be stopped. Also alert the platform where you saw the property advertised, reporting the post or ad as a scam.

"IDCARE is another government-funded service that works with victims of identity theft to develop a specific response plan and support them throughout the process."

Feature Image: Getty.