Security Deposit Scams Every Renter Should Know About

The security deposit scam to watch for is the fake or copied rental listing: someone who does not own or manage the home asks for an application fee, a deposit to hold it, or the first month's rent before you have toured it or signed a lease, then stops answering. The Federal Trade Commission (FTC) says paying by wire transfer, gift card, or cryptocurrency is the same as sending cash, so once that money is gone you probably cannot get it back. Before you pay anyone, confirm who owns the property in the county's tax records and get a written lease or written holding terms. If you already paid, contact your bank or payment company right away, then report the scam to the FTC and to the FBI's Internet Crime Complaint Center (IC3).

How rental listing scams work

The FTC describes two versions:

• Hijacked listings: scammers copy the photos, description, or virtual tour from a real rental ad, swap in their own contact information, and post it on another site.
• Fake listings: scammers advertise homes that are not for rent or do not exist. A home you find listed for sale, rather than for rent, is a warning sign.

The pitch is similar in both. The rent is surprisingly low or the amenities unusually good, the "owner" says they are out of the country or otherwise cannot show the home, and they push you to pay quickly before someone else takes it. Some set up a self-guided tour to make the listing look real, so walking through a property does not prove the person you are paying controls it.

Warning signs before you pay

Stop and verify before paying if you see any of these:

• Payment by wire transfer, gift card, or cryptocurrency. Western Union and MoneyGram wires, gift cards, and crypto are the methods the FTC says rental scammers ask for.
• A payment-app transfer to someone you have never met. The Consumer Financial Protection Bureau (CFPB) says to use payment apps such as Zelle, Venmo, or Cash App only with people you know and trust.
• Money due before you have seen the home or signed a lease, usually with a reason the owner cannot meet you there.
• Rent well below similar listings nearby.
• Pressure to decide today. The FTC's advice is to walk away from anyone who pushes you to decide quickly.
• The same home listed for sale, or listed elsewhere under a different owner or company.

How to verify the owner and the listing

1. Search the address together with the owner's or rental company's name. If other ads show a different owner, company, or contact, treat that as a warning sign and do not pay until the owner or management company confirms the listing through contact details you find yourself.
2. Look up the owner on the city or county tax assessment website, and check that the landlord's ID matches the name in those records.
3. Confirm with the company. If a property management company is named, find the listing on the company's own website and contact the company through information you find yourself, not the phone number or email in the ad.
4. Search for complaints: the owner's or company's name with words like "complaint," "review," or "scam."
5. Hold back personal and financial details until you have confirmed the owner. If someone says they work for the owner, confirm that with the owner or management company directly before you give them anything.
6. Pay the verified owner or company only after you have a written lease or written holding terms, by a method that leaves a record, and get a receipt. Our guides to rent payment methods and security deposit receipts cover which methods leave a record and what a receipt should include.

How a legitimate holding deposit works

A real landlord may ask for a fee or deposit to hold a unit after it has offered the unit to you, for example once it approves your application. Before you pay, get the terms in writing: the amount, how long the unit will be held, when the money is refundable, and whether it will be credited to your first month's rent or security deposit.

Washington's rules show what to ask for. A landlord there may not charge any fee to put you on a waiting list, may not charge more than 25% of the first month's rent to hold a unit, must give you a receipt and a written statement of when it can keep the money at the moment you pay, and must credit the amount to your first month's rent or security deposit if you move in. A request for a holding deposit before anyone has shown you the home or reviewed your application is a reason to stop. For the steps before a lease is signed, see the rental application process.

What to do right after paying a scammer

Act the same day. The company that moved your money may be able to stop or reverse the payment, and the FTC's steps depend on how you paid:

A refund is not guaranteed. Whatever the company says, take these steps next:

1. Report the scam to the FTC at ReportFraud.ftc.gov and to the FBI at ic3.gov. The FBI says it cannot respond to every complaint, but reports help it investigate and, in some cases, freeze stolen funds. Also report the ad to the website where it was posted, and tell your local police and your state attorney general.
2. Protect your identity if you gave the scammer your Social Security number on a fake application. IdentityTheft.gov gives you a recovery plan if the number has been misused, and protective steps if it has not.
3. Ignore offers to recover the money. The IC3 says it does not work with law firms, crypto services, or any other non-law-enforcement group to recover lost funds and will never contact you directly for information or money.
4. Keep the evidence: screenshots of the ad and every message, the scammer's phone number and email address, and your payment confirmation.

When the landlord is real

Not every deposit problem is a scam. A real landlord that keeps your deposit after you move out without a lawful reason is breaking your state's deposit law, and you can demand the money and, if needed, sue for it in small claims court. The overview of state security deposit laws explains the deadlines and penalties, and for the rest of your search, see apartment hunting tips.