VANCOUVER, British Columbia, Aug. 01, 2023 (GLOBE NEWSWIRE) -- Amid an already perilous climate for Canadian renters, peak renting season is approaching again, with demand already reaching historic levels as of July 2023. Vancouver-based rental platform liv.rent has seen a 50% increase in reports of suspicious listings between April-May 2023 and June-July 2023, signaling that this summer may be a particularly perilous time for renters – especially given that the platform’s most popular listings receive upwards of 250 inquiries in extreme cases. Accompanying this rapid rise in demand, the complexity and severity of rental scams has grown as well, with more elaborate scams resulting in a $64 increase in the average dollar loss per victim – with each victim losing an average amount of $1,499.61 [Source: CAFC].
Experts expect this danger to compound throughout the busy summer renting season with over 1.5 million students urgently seeking rental housing in time for the fall semester, and between 410,000 to 505,000 new permanent residents expected to enter Canada by year-end. Compounded with rental housing supply shortages in major rental markets across Canada and the resulting high rent prices, these vulnerable populations are more at risk than ever. The time is now for Canada’s rental industry to take decisive action to safeguard renters against increasingly hard-to-detect scams.
A widespread threat
Awareness of the threat of rental scams has spread far beyond the rental industry as increasingly complex scams make headlines across the country. For 2022, the Better Business Bureau ranked rental scams as the #7 riskiest scam in Canada, the first time rental scams have made the top 10 list, with 4 out of 10 Canadians who are exposed to rental scams losing money. This comes as rent prices have risen exponentially across the country, buoyed by rising interest & mortgage rates and the continued effects of inflation. According to the Canadian Anti-Fraud Centre, rental scams cost Canadian renters a total of $721,952.24 last year across 788 reported incidents – though a spokesperson observed that this may only represent as little as 5% of actual cases, since most victims of fraud won’t file a report.
“My sister was desperate to find a place and ignored the telltale signs of rental scams: too good to be true pricing, unable to view property, poorly constructed emails, non-Canadian number. She ended up giving copies of her ID and SIN, so I had her to freeze her credit and report the fraud.”
–Anonymous renter, Montreal, QC
More sophisticated scams
Concerningly, rental scams are growing more complex and are often difficult to recognize despite renters becoming better educated about their existence. Recently, more than 10 people in Victoria, B.C. fell victim to a similar scam, reported on by CTV News, where a fake landlord hosted in-person viewings for a short-term rental he was using, going so far as to produce a fake lease agreement before accepting a damage deposit and first month’s rent. When move-in day arrived, the suspect would tell prospective tenants that there had been a flood and their move-in date would have to be delayed, when in reality the property was never his to rent in the first place.
This comes alongside more frequent and intense occurrences of known scams, such as a London, Ontario landlord defrauding more than 35 renters with a listing that never existed. While the majority of rental scams still stem from fake profiles and listings, being able to spot warning signs is becoming increasingly difficult due to the rapid pace of the current rental environment. Blurry listing photos, obscured address details, and urgent demands for personal information or upfront cash deposits are all tell-tale signs but are easily missed when renters are in a rush to sign a lease.
“A home in my area was listed on Craigslist for rent. Besides text messages, the landlord never responded to my phone calls. After signing a rental agreement, I requested to view the property before sending money. But the landlord demanded the money first, so I didn't end up renting the place.”
–Anonymous renter, Toronto, ON
Awareness only goes so far
Canada’s rental industry has been taking steps to combat online rental scams, but stricter measures are necessary to curb this growing threat. As it stands, a number of rental platforms have processes in place to delete user-reported listings, with many also providing educational content and warnings to users about rental scams. These efforts largely fail in proactively addressing the root problem though, as 43% of Canadians encountered fake ads as far back as 2019. We predict that this number has increased significantly in the years since, compounded by the increasing digitization of the rental process during the COVID-19 pandemic and recent factors like supply shortages and considerable demand. As these scams become nearly unavoidable, the need is clear for further safety measures and additional efforts to warn and educate renters about the dangers of rental scams.
In response to this, one Canadian rental platform has taken decisive action to combat rental scams by verifying both landlords and listings. liv.rent manually confirms landlords’ identities through user-uploaded photo ID matched against a selfie, with renters able to immediately see that they’re dealing with a real person through verified badges. Similar measures are taken for properties, with landlords asked to either submit ownership documents or enter a one-time code mailed to the address provided.
These security measures have proven to be a great first step towards building trust and transparency in Canada’s rental industry, along with educating both renters and landlords about the dangers of rental scams and how they can protect themselves.
Action needed to protect renters
Canadian renters are becoming increasingly aware of this dire situation as rental scams become nearly unavoidable in the current market. Following a year in which Canada’s population grew by nearly 1.1 million people, the current levels of demand for rental housing are unprecedented and create a dangerous environment for renters – particularly those new to the country and unfamiliar with the legislation that should protect them. Safeguarding vulnerable communities and ensuring newcomers to Canada aren’t met with costly rental scams should be priority number one for the rental industry as a whole.
Verified landlords and listings are a step in the right direction and have already proven to be a hit with users. According to liv.rent data, 62% of renters searching chose to click into verified listings as opposed to unverified listings in the past year, even though the average rent price of these verified listings was 22% higher than unverified ones, thus showing that measures such as these are proving effective in the fight against rental scams. However, further steps and broader education efforts are still needed to ensure that every Canadian has the tools to recognize and avoid scams.
"I've encountered a few scams, for listings at too good of a price - often properties that just got listed for sale. [The landlord] claims they're not in town, will send a relative to show you the space, and say you must sign the lease immediately. Once you agree, they ask for the first month's rent by e-transfer and go on to say that you can cancel the e-transfer if you don't want the place.”
–Anonymous renter, Vancouver, B.C.
While the country’s rental platforms continue to develop new methods of promoting transparency, Canadian renters are encouraged to remain vigilant and educate themselves in order to quell the growing threat posed by rental scams.
About liv.rent
liv.rent is a Vancouver-based all-in-one rental platform that goes beyond listings, helping Canadian renters and landlords discover an easier, safer way to rent. Since launching in 2018, liv.rent has been a leader in the rental industry, transforming the way Canadians rent with the integration of technology and innovative safety measures. By automating every step of the rental process from searching for and creating listings to signing digital contracts, this platform has grown to create a safe and trusted community of landlords and renters. From liv.rent’s inception, strict verification processes for both landlords and listings have been a core part of the platform.
The rental platform has recently put together a dedicated Rental Scams Resource Hub as well, designed to educate renters about the danger of scams through first-hand reports, details on common types of scams, and tips for staying safe while renting.
Contact:
Matisse Yiu
Marketing Manager
liv.rent
media@liv.rent
