Looking for flats for rent? Don’t be a victim of this scam

By Elliot, Wright, 15th February 2010

Property hunters are being urged to take extra care not to be scammed when searching for rooms or flats online.

National charity Citizens Advice is warning people to be wary of ads on websites that ask for the searcher to 'prove funds' via money transfer prior to viewing the property.

The charity's network of Citizens Advice Bureaux are reporting cases of people falling victim to a scam where Landlords - who often state they live out of the country - ask prospective tenants to make a 'secure' money transfer to a trusted person such as themselves or a friend/relative. They are then asked to send a copy of the receipt to the Landlord to prove they have sufficient money for deposit and rent before they are shown the property.

The would-be tenants are reassured that no-one else can access the money, but find when they go to collect it that the money has already been withdrawn and the room or property doesn't exist.

One CAB reported a couple who found a flat on an online classified ads site. Before they were shown the flat, they were asked by the advertiser to make a secure money transfer of £650 to a trusted person and fax a copy of the receipt to prove their funds. The couple were dubious about the request and called the money transfer company to seek advice. They were told that without showing personal I.D such as a passport no money could be withdrawn. Reassured, the man transferred the money to his fiancé and faxed the Landlord a copy of the receipt obscuring all other details except the amount and Money Transfer Number (MTN). When the couple went to pick up the cash they were told the money had been paid out already in California. Upon reporting the crime to the police they were told there was nothing that could be done.

Another CAB saw a student who had been asked to transfer £1,800 to a friend via money transfer to prove she had enough money to rent a room she found online. She did so and sent the receipt to the Landlord as proof. When her friend went to collect the money they found it had been collected by someone else, and were told by the transfer agency that the person had given the Money Transfer Number and shown I.D in the correct name. When the client went to report the crime to the police they said there was no case because she was unable to give sufficient information of how the funds had been collected. Having tried to get this information from the money transfer company, she was told they couldn't give details without a crime reference number due to data protection - so she found herself in a Catch-22 situation and nearly £2k out of pocket.

Citizens Advice Consumer Affairs Policy Officer Susan Marks said:

"Money transfer, used in any situation other than to send money to someone you know, is not secure. It should never be used as a way of proving funds or as a method of payment to someone you don't know - sharing your money transfer number or copy of your transfer receipt is like handing over your PIN number to a stranger. It's not the same as transferring money from one bank to another, and isn't covered by the same safeguards.

"Unfortunately the very nature of what makes money transfer appealing - that its quick and easy and that money can be sent to numerous outlets in the U.K or abroad - is also the thing that leaves it open to exploitation by fraudsters.

"Consumers must be warned about the dangers and we want to work with money transfer companies to help them to tackle the misuse of their services and thwart fraudsters. As well as making sure there are obvious warnings on receipts about fraud risks we also want to look at how ID checking processes can be strengthened."

The charity has come up with some 'Top Tips' for anyone thinking of making a money transfer and/or searching for property to let online:

• Never share your money transfer number or copy of the receipt - it's not secure
• Never part with any money before you have viewed the room or property in person
• Never agree to transfer money, even to yourself, to prove you can afford deposit and rental payments
• If you or the prospective Landlord live abroad, offer to provide references from previous Landlords and other professionals such as a G.P or employer who can vouch for you, rather than transferring money
• If at all possible, meet the Landlord in person and never hand over any money until you have seen a written contract and checked it over
• Do a Land Registry check to confirm that those who say they own the building actually do own it. See www.landregistry.gov.uk for more information.
• All Landlords must be part of a registered Tenancy Deposit Scheme which protects your deposit. One way to check any prospective Landlord is legitimate is to ask for the details of which scheme they're registered with and check that they are. See www.direct.gov.uk/tenancydeposit for more information.
• Use a reputable letting agent from the High Street, who is registered with the National Approved Letting Scheme (NALS). Agencies belonging to this scheme have agreed to follow a set of standards which include a complaints procedure.

Useful links:

Landlord complaints

Claims Financial