Scams targeting renters are on the rise.

Rental properties are at a premium in our cities. Auckland's rental market has risen 7 percent over the past year, leading to surges of hopeful tenants turning up to view advertised properties. Add to this the obvious problems in quake-devastated Christchurch, which have been compounded by controversial rent hikes, and many would-be renters are feeling the squeeze.

So much so that some are resorting to desperate measures. Prospective tenants have been offering to pay higher-than-advertised rentals, and some are even signing tenancy agreements before they have viewed the property. In a tight market, this behaviour is understandable – but also leaves renters vulnerable to scams.

Advertising scams

One scam targeted at renters is to list a property on a rental website – often a copy of an existing or previously featured ad – and when people respond the listers demand a deposit without a viewing of the property.

Green Newman Holdings (Consumer NZ's landlord) was on the other end of this type of scam. One of its residential tenants in Petone opened the door to a couple with a removal truck who claimed they were due to move in that morning. They had seen the flat on the internet in December and paid a deposit online to someone called "Felicity". Green Newman Holdings did not know Felicity and didn’t recognise the bank account the money had been paid into. Unfortunately, this couple was the victim of a scam.

These scammers are usually based overseas, and once they've got your money they disappear without a trace. Not only is the money unrecoverable but there is also the stress, cost and heartache of packing everything – only to find there's nowhere to move to.

June 2011 update: student targets

A variant of this scam has recently surfaced which specifically targets students. In the example we saw, a central Auckland two-room apartment was "advertised" at an incredibly cheap price of $300 a week. The "owner" of the apartment was overseas but for a $1200 deposit through Western Union they would send the key and the contract.

This offer appeared to have been listed on a site called "airbnb.com", and came with a list of testimonials from satisfied customers. There is a site listed under that name – but it's not a property rentals site, it's a hosting site for travellers looking for a place to stay in other countries. Also, payments are made through this site with PayPal, not Western Union.

The Ministry of Consumer Affairs told us this is a scam that’s been reported to it regularly. We were also pleased to discover that Trade Me is alert to these scams.

We came across a similar listing onTrade Me Properties when researching this article. Within an hour we received an email from Trade Me warning us that the listing was a scam and telling us various bad signs to look out for, as well as a contact number and email address through which to report dodgy traders.

Avoiding problems

Because these scammers tend to use copies of others' advertisements on legitimate websites, it's difficult to weed out bad ads from good. So make sure you follow these tips:

• Never pay a deposit or send ID until you have physically visited a property and met with the landlord. And make sure it’s a genuine tenancy before you do pay.
• Never deal in cash. All payments should go into a valid New Zealand bank account. Look out for Western Union transfers – these will almost certainly be a scam.
• If a property is offered at a price below market value, be suspicious.
• Check the website that the ad purports to be from, and find out if it's really listed – or if the site is even what it claims to be!
• If you come across an offer like this, forward it to the website they are claiming to be and also to Scamwatch at the Ministry of Consumer Affairs.

More from consumer.org.nz

• Landlords and tenants – our guide to your rights.

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