Craigslist has become one of the most popular advertising websites on the Internet, and an effective advertising tool for REALTORS®. In fact, advertisements for real estate have increased by nearly 70% since the launch of Craigslist, with more than 50 million visits to the website each month.

While Craigslist can be an effective marketing tool for REALTORS®, it is also vulnerable to scam artists looking to take advantage of consumers. Scam artists create advertisements using photos and property details they copy from real estate websites. And, the scams are hitting close to home.

Is it real, or is it a scam?

Amanda Thomson and her fiancé were looking for a home to rent in Burlington.  “I fell in love with the house, but there was something about it that didn’t seem right,” said Amanda. After receiving a request for a deposit in exchange for a house key to the property, Amanda decided to do her homework. Amanda contacted Coldwell Banker Hickok and Boardman (CBHB), the listing firm for the property. She discovered that the rental listing on Craigslist was a scam. Photos and a detailed description of the property had been copied from an online advertisement of the property and posted on Craigslist. The property, which is for sale, was listed on Craigslist as a rental.

"The issues we discovered on Craigslist are certainly not limited to our marketplace," said Leslee MacKenzie, president/owner of CBHB. "It's a reminder for everyone that the Internet serves as a great tool, but not a replacement for conducting business face-to-face, especially when it involves a major purchase or financial decision."

According to the Vermont Attorney General’s office, the best form of protection from such scams is public awareness. There are some easy ways to identify a potential hoax. But, tenants are often under pressure to find housing and are holding on to hope, especially in a market that has a low vacancy rate.

Rental Scams

The most common rental scam on Craigslist goes something like this: You're  looking for a house or apartment to rent. You find an advertisement for a place that's available at an excellent price. You feel confident that the ad is legitimate because it's professional looking, and includes photos and details of the property. You contact the person who posted the list (via email) to express interest in the home, and they quickly reply.

The poster says that they're very happy to hear from you and that you sound like a nice, responsible person. They're grateful to you because they love their home, but have had to leave the country because of business or personal reasons. If you send them a deposit, they'll be happy to mail you the key. You send the money, but no key arrives in the mail.

In another rental scam, you respond to an ad, and the poster agrees to show you the property. You view the place in person, and all seems well. The landlord asks for a deposit, which you give him. Later on you find out that the person who showed you the property is not the actual owner. You're now out both the money and the place.

To make his ad look legitimate, he copied details from another online ad or from the MLS itself, and created his own advertisement. He also met you in person, seemed friendly, and showed you the property. Unless your instincts are really sharp, it would be hard to detect this person as a scammer.

Seller Scams

You're not immune to Craigslist scams if you're trying to sell or rent out your home either. The most prevalent type of fraud involves an out-of-country buyer (or renter) who responds to your ad. They say they want the property, and to ensure that you hold it for them, they'll send you a check or money order for the deposit.

The transaction gets fishy when they say that they need to send you a money order for more than the deposit amount, with a request that you wire them back the difference. For instance, rather than sending a money order for just the $1000 deposit, they tell you an elaborate story about  why they need to send a money order for $3000 instead. They'll ask you to take out your $1000 and  send them back the difference via  Western Union. You receive the money order as planned, and agree to wire them the difference. Soon you receive a call from your bank saying that the money order was  a fake, and that you're liable  for the fraudulent money order. You're now out the money you wired, in addition to owing the bank money.

Here are some tips from Craigslist on how to sidestep would-be scammers:

• DEAL LOCALLY WITH FOLKS YOU CAN MEET IN PERSON - follow this one simple rule and you will avoid 99% of the scam attempts on craigslist.
• NEVER WIRE FUNDS VIA WESTERN UNION, MONEYGRAM or any other wire service - anyone who asks you to do so is a scammer.
• FAKE CASHIER CHECKS & MONEY ORDERS ARE COMMON, and BANKS WILL CASH THEM AND THEN HOLD YOU RESPONSIBLE when the fake is discovered weeks later.
• CRAIGSLIST IS NOT INVOLVED IN ANY TRANSACTION, and does not handle payments, guarantee transactions, provide escrow services, or offer "buyer protection" or "seller certification"
• NEVER GIVE OUT FINANCIAL INFORMATION (bank account number, social security number, eBay/PayPal info, etc.)
• AVOID DEALS INVOLVING SHIPPING OR ESCROW SERVICES and know that ONLY A SCAMMER WILL "GUARANTEE" YOUR TRANSACTION.

Who should I notify about fraud or scam attempts?

• FTC toll free hotline: 877-FTC-HELP (877-382-4357)
• FTC online complaint form here
• Canadian PhoneBusters hotline: 888-495-8501
• Internet Fraud Complaint Center here
• Non-emergency number for your local police department.
• If you suspect that an item posted for sale on craigslist may be part of a scam, please email the details to "abuse@craigslist.org". Be sure to include the URL (or eight-digit post ID number) in your message.