Last December, former Knoxville, Tennessee, resident Lisa Jones decided she wanted a fresh start. She set her sights on moving to Milwaukee, where she lived during college before graduating in 1998.
Jones started browsing apartments for rent "just for the heck it" when she came across the ideal listing.
A Craigslist post showed the bottom floor of a house available for rent in Riverwest — furnished, affordable and owned by a real person, rather than a company. Best of all, the landlord was offering a month-to-month lease.
"I didn't want to get locked into a year lease if I didn't like the place," said Jones. "Let's just keep this between two people — old school, you know what I mean?"
The listing included the address of the property and multiple photos of the interior. Jones said the person leasing the apartment, someone named Paul Schwartz, even sent her a photo of his ID to verify his identity.
At first, Jones wondered why he didn't have a Wisconsin license, but he assured her the address on his ID was just where he lived part time. Although she felt skeptical, she talked herself out of it, chalking it up to being paranoid.
Jones now wishes she trusted her gut feeling. It wasn't until after she sent over a $600 security deposit and made the 10-hour drive to Milwaukee that she realized the person she was speaking to never owned the property at all.
Jones isn't the only one to fall victim to this scam, Public Investigator found. According to police reports and messages on the online forum Reddit, at least six other people in Florida, Nevada and the District of Columbia have reported being duped by someone posing as a landlord named "Paul Schwartz."
Fort Lauderdale's single report was filed in 2020. In Reno, four were filed between late 2020 and mid 2021. In D.C., one was recorded in 2019. In each case, victims said they were under the impression they'd found an apartment listing on Craigslist, only to find out they were scammed after sending over hundreds of dollars for security deposits or first month's rent.
Police in both Fort Lauderdale and Reno said the real Paul Schwartz, the person on the license, is not behind the scam and that the culprit is using his ID to shield his or her own identity. Schwartz declined to comment.
However, police said they have been unable to locate a suspect due to how difficult it is to trace fake phone numbers, email accounts and activity on money transfer apps.
For example, according to Reno Police Department records, the detective investigating the scam hit a roadblock because the money sent to the scammer's Zelle account was immediately used to purchase cryptocurrency, which is "difficult to trace."
As a result of the scam, Jones has been living out of her car for over a month. Financially and emotionally, she's been unable to bounce back.
"I just can't let it go," Jones said. "I just can't, and I don't know why. It's just made me so weary."
Red flags began with pushy texts, then became requests for more money
Jones said the person advertising the apartment seemed legitimate at first. They sent her photos of the space, assured her her cat was allowed, and informed her of the 60 days' notice policy when it came to ending her stay.
However, Jones said she started receiving "pushy" messages around Christmas, repeatedly asking if she was still interested.
"I should have just stopped (talking to them) then," Jones said.
Still, Jones said she was desperate to make sure she had a place to stay when she came to Milwaukee, so she told them she would rent the space. The next few days consisted of packing and solidifying her plans to make the drive from Knoxville to Milwaukee.
Three days before her planned move-in date, and one day before she planned to leave, the person posing as the landlord requested a $600 security deposit to be sent to their fiancéeover Zelle, to which she agreed.
"I was really kind of obsessed with finding something so I could just drive into town and know where I was staying," Jones said. "I really needed that."
But later that same day, they sent her a message asking for more money.
"Can you complete the payment of the first month's rent so I can balance my books?" they texted her.
Jones said the text made her heart sink.
"I just started to cry," she said.
The request prompted Jones to ask for her security deposit back, telling them she no longer felt comfortable with the deal. But they continued to ask for the money, insisting it was necessary for her to move in.
Instead, Jones offered to meet the day after she arrived, so she could see the space. After that, she would make the requested payment.
"I was moving across the country and needed to lock in something," Jones said. "I guess he could smell the desperation."
She left the next day, driving for two days with her cat in tow. She got to the hotel she'd booked for her first night there and texted her prospective landlord that she'd arrived.
But there was no reply to her multiple texts.
Jones said she "scared herself" with how much rage she felt after realizing she was out $600 with nowhere to go.
Real estate and rental fraud scams affect thousands each year
According to the FBI's 2022 internet crime report, 11,727 people in the U.S. reported falling victim to a real estate investment or rental fraud scam in 2022, losing a total of almost $400 million.
Scammers' tactics are constantly evolving, but the Federal TradeCommission provides advice on how to avoid and report them.
"The key is to weed out the bad (listings) from the good, and they can be hard to spot, so it's important to do research," said Anna Burns, director of the Federal TradeCommission's southeast region.
No matter which website you find the listing on, Burns said, the key is for buyers to always do their research — and give it a gut check.
"If you see a property that looks like it's a great deal and at a much lower price than you might otherwise be paying in that location for a property of that sort, that should raise a red flag to do additional research," Burns said.
Burns suggests verifying if the person advertising the home is the actual property owner by looking up the address in the city's property assessment data. For example, if Jones had looked up the apartment she thought she was renting in Milwaukee's property records, she would have found out that the listed owner was not Schwartz.
Burns also recommends seeing the property and meeting the agent in person before making a payment. If you can't go in person, Burns recommends asking someone you trust in the area to go make sure it's really for rent, or requesting a virtual tour.
Burns also warns against ever paying security deposits or rent through wire transfers or apps like Zelle, Venmo or Cash App. Not only is this a sign of a potential scam, but this also strips people of usual protections that come with traditional payment methods, like credit cards, she said.
"It's extremely difficult to get that money back," Burns said. "It's just like sending cash."
Zelle, Wells Fargo decline to reimburse Jones for the scam
Jones learned that the hard way.
Although you can report a scam to Zelle, the company said Jones' situation doesn't qualify for reimbursem*nt.
A spokesperson for the company Early Warning Services, which owns and operates Zelle, told Public Investigator that, as of June 2023, Zelle's bank and credit union participants only reimburse consumers for "certain qualifying imposter scams."
"Fraudulent transaction claims — those where a bad actor initiates a Zelle transaction from a consumer’s account without authorization — have always been reimbursed and that has not changed," the spokesperson said.
However, in this case, Jones authorized the transaction. That's also why her bank, Wells Fargo, declined her fraud claim.
"Based on the information available to us, we have determined that this payment was processed as requested, and that no error occurred," Wells Fargo said in response to her claim.
Wells Fargo spokesperson Mike Slusark said the bank gives multiple warning notifications before a customer can complete a Zelle transaction through the Wells Fargo app or online banking. Warnings include a confirmation prompt with the legally registered first name of the account owner so customers can check it against the recipient name they entered.
Jones said the name "Paul" didn't come up during her transaction. Instead, the name shown was "Wendy Felts," whom the scammer claimed was his fiancée.
"This prompt also reminds our customer to only send money to people they know and trust," said Slusark.
Milwaukee Police Department spokesperson Sgt. Efrain Cornejo said victims of rental scams should always report what happened to them to police.
"If they do not report them, then we would not be aware of them and be able to determine any trends," said Cornejo. "Officers will be able to advise the individual properly depending on the circ*mstances of the incident."
Jones said she didn't report her experience to police because she didn't know she could.
People can also report scams at reportfraud.ftc.gov. When they do so, their complaint goes to a database that is not only used by the FTC, but also by law enforcement across the country.
Generally, the FTC can investigate and prosecute rental scams, said spokesperson Jay Mayfield.
"That said, it’s worth noting that this would also be under the authority of state attorneys general and local consumer protection authorities," Mayfield added.
These local consumer protection authorities include the state's Department of Agriculture, Trade and Consumer Protection.
Scam leaves Lisa Jones struggling to find stable housing
Today, Jones is still struggling to find a place she can call home. She splits her time sleeping at a friend's house, in a hotel, or in her car.
As of June, she remains on an affordable housing waitlist that she joined after calling the social services hotline Impact 2-1-1 in May.
Krystina Kohler, financial stability portfolio manager for United Way, has stayed in touch with Jones throughout her search for affordable housing. Kohler said the most vulnerable people are prioritized for the next available spot, making it difficult to estimate how long it will take Jones to get off the waitlist.
While Kohler knows this isn't the advice people always want to hear, she said people in need of affordable housing should keep calling 2-1-1, especially if their situation is changing.
"If a person's situation is changing, like getting kicked out of a couch-surfing situation or losing their source of income, that could place them higher up on the prioritization of vulnerabilities, and they might be more likely to get into a program more quickly," said Kohler.
Jones said Kohler has been "awesome and compassionate." But when it comes to somewhere to live, Jones still doesn't have a concrete plan.
For now, she said it's comforting to know she isn't the only victim of the rental scam.
"It does help knowing," Jones told Public Investigator. "I appreciate you so much. Thanks for following up and caring."
Quinn Clark is a Public Investigator reporter. She can be emailed atQClark@gannett.com. Follow her on Twitter at@Quinn_A_Clark.
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