By Tiffany Ross- Consumer Resource Officer
Over the past year, the North Carolina Real Estate Commission has released several detailed scam alert articles, including Fake Seller / Fake Buyer Scam Alert, Notary Fraud / Deed Fraud Alert, Be Aware of Scam Sellers, and Rental Fraud Scam Alerts. In addition to these, NCREC, in conjunction with the North Carolina State Bar and Investors Title, hosted several Wire Fraud Conferences across the state. Vacation Rental Fraud is the latest scam that we want to educate consumers about.
Vacation Rental Scams
Many vacation rental scammers use reputable vacation rental websites to advertise, so the scams are harder to spot. These scams affect both the vacation rental tenant, and the property owners, as bad actors will pose as either to run their scheme. For those looking to rent a vacation property, there may be a fake listing where someone asks you to send money in advance as a deposit or full advance payment. Additionally, scammers may hack the email accounts of actual property owners or managers and then contact legitimate travelers and request payments to be made providing different instructions from previous deposits paid. Beware of sending any funds without verifying the receiver is legitimate.
For owners looking to rent out their vacation property, there are several scams to be aware of, including fake guests that will send a fraudulent check for more than the rental rate, and then ask for a refund of the difference. Real guests sometimes will stay and damage the property or plant insects in the property and claim it was damaged on arrival or infested. Another example is parents knowingly renting properties for their underage children for spring break without an adult being physically present to supervise and prevent damage to the property or underage consumption of alcohol. Being aware of these scams and not falling for these tactics can prevent the loss of hundreds or even thousands of dollars.
Action You Can Take:
Red Flags That You May Be Dealing With a Fake Owner/Manager Scammer
What To Do If You Are Already a Victim Of a Vacation Rental Fraud Scam in NC
If you responded to a fake ad and sent money, but never heard from the scammer again, contact the North Carolina Attorney General’s office to notify them of the scam and provide as much information as you can. If the property is located outside North Carolina, contact the Attorney General’s office for that particular state. You should also report the incident to the service or website you were using, and/or the actual owner/property manager if you were a tenant victim, as well as the Federal Trade Commission. You can also contact local law enforcement (sheriff or police) and submit an internet crime complaint to the FBI to report the scam and see if there is any chance of recovery.
How You Can Protect Yourself or Your Clients
If you work in vacation rental property management and have clients who rent their vacation properties to tenants, educate them on these dangers and assist them by enhancing your screening processes of potential vacation rental tenants. If you are working with a vacation rental tenant, provide information like this article to help them avoid the scams and traps, and assist them with carefully verifying the vacation rental details. Stay in contact with them, and make sure they are aware of the NC Vacation Rental Act. If you are considering a vacation rental, be sure to verify that the rental is legitimate and watch out for the red flags above to protect yourself in the process.
If you or your clients have a problem with a vacation rental, and a licensed real estate broker is involved, contact the Commission’s Regulatory Affairs Division at (919) 719-9180. If there are concerns about the actions of an unlicensed property owner managing their own property, or other unlicensed property management activity, contact this office and the Attorney General’s office (877) 566-7226.
By Tiffany Ross- Consumer Resource Officer & Bruce Rinne- Information Officer
Consumers need to be aware that there is now an organized effort of scammers engaging in deed fraud. They create deeds with false signatures of the seller, and have them illegally notarized by someone who is not a notary, or a real notary who was willing to accept a payoff and falsely notarize the document. These fraudulent documents are being taken to the Registers of Deeds and recorded, transferring the ownership from the unsuspecting rightful owner, to a new owner, who may or may not be a real person.
If undiscovered, this property may then be listed and sold to a bona fide purchaser for value. If this is the case, the new owner, this legitimate purchaser, is now the rightful owner of the property. The money has been stolen by the fraudster, and the original property owner has had their property stolen from them.
There is typically nothing that the property owner in a case like this did wrong. There is nothing they did to cause a scammer to target them, and if they are not made aware quickly enough, they may not be able to take action to stop it.
Many Register of Deeds offices in North Carolina now have a fraud alert that owners can sign up for to receive an email if there is any documentation filed against their property. If a fraudulent document is discovered, the property owner must take immediate action to try to retrieve rightful ownership of their property.
Actions to Take Immediately:
If you have not been a victim and would like to know ways to help protect yourself or your property, you may consider registering your property on the Torrens System. It is a lengthy and somewhat expensive process, but would prevent a property from being able to be fraudulently transferred.
There are other services that claim some ability to assist with protecting your identity/property, that offer monitoring and insurance you can purchase, that can assist you if you have to incur legal expenses to sue to reacquire your property. Just like any other crime, you should be aware and take precautions to protect yourself and your loved ones as much as you can. Keeping an eye on your property with the Register of Deeds regularly (some sources recommend monitoring your property weekly) is the best way to prevent yourself from becoming an unsuspecting victim of this type of scheme.
How You Can Protect Your Clients:
1 – Educate them! The more people know, the more they can be on alert and check on their property more frequently.
2 – Be aware that fraudulent buyers and sellers are on the rise, and brokers must exercise extra caution in verifying both. Be suspicious of would-be clients that will not meet with you by a video chat or means that will allow you to see and speak with them.
3 – Check the deed and public records for a property your buyer-client is considering purchasing, or that your seller-client is considering selling, to make sure that there wasn’t a suspicious recent transfer in ownership that could be fraudulent. If suspicious, dig deeper, make efforts to contact the listing agent or seller if not listed, to be certain the due diligence has been performed to properly identify the seller as legitimate.
4 – If you discover that a fraudulent transfer has occurred, assist your client in taking immediate action described above to have the best chance of restoring their property, if they are the seller. If your client is the buyer, notify the rightful owner of the transfer even if you are the buyer’s agent, as your duty to discover and disclose material facts is to all interested/involved parties, not just your client.
By Tiffany Ross- Consumer Resource Officer & Bruce Rinne- Information Officer
The North Carolina Real Estate Commission has been receiving an increasing number of calls and emails about fraudulent rental ads attempting to scam innocent people out of their security deposits or application fees. These scam artists can be located anywhere in the world, yet claim they are local property owners. Here is information about rental scams and the Red Flags to alert you of a potential scam.
How You Can Avoid a Rental Scam
Many rental scams take place on social media. For example, a fake owner or fake property manager posts on Facebook, Craigslist, Twitter or other social media outlets. The posts look legitimate and may even have actual pictures of the real property they are claiming to be renting. In reality, the scammer has no connection to the property or right to advertise it, but the ad will ask for upfront payments to even view the property, or first month’s rent or a security deposit in advance. They may promise the money will be held in a trust account, and the destination appears to be legitimate, but it really goes to a scammer who is never heard from again. Being aware of this scam and not falling for these tactics can prevent the loss of hundreds or even thousands of dollars.
Action You Can Take:
Red Flags That You May Be Dealing With a Scammer
What To Do If You Are Already a Victim Of a Rental Fraud Scam
If you have already responded to a fake ad and sent money, only to never hear from the scammer again, you can contact the North Carolina Attorney General’s office to notify them of the scam and provide as much information as you can. You can also contact local law enforcement (sheriff or police) and submit an internet crime complaint to the FBI to report the scam and see if there is any chance of recovery.
How You Can Protect Your Clients
If you work in sales and have clients that need to rent before purchasing a home, educate them on these dangers and assist them by looking up properties listed in the MLS or refer them to legitimate property management company websites in your area. Provide information like this article to help them to avoid the scams and traps, and assist them with verifying property owners through a public records search. Stay in contact with them, and make sure they are aware of NC Landlord and Tenant laws. They can contact the Commission’s Regulatory Affairs Division at (919) 719-9180 if they have questions or concerns about the actions of a licensed property manager. Or, they can contact the Attorney General’s office (877-566-7226) if they have concerns about the actions of an unlicensed property owner, managing their own property, or other unlicensed property management activity.