Foreclosure renting scams on Craigslist counted among top consumer complaints

The top consumer grievances in 2011 included complaints about fraudulent rental listings on Craigslist, according to a report.

More specifically, the fraud pertains to criminals who masquerade as property owners after breaking into bank foreclosed homes and offering the illegal rentals on the website, a report Consumer Federation of America and North American Consumer Protection Investigators found.

The annual list also included mortgage company complaints and time-share high pressure sales tactics, among other real estate related issues.   

After responding to Craigslist postings, some scam victims have paid deposits or rent payments to someone they thought was the homeowner.

“Then comes the banks saying, ‘What are you doing in my house?’” Carlos Morales, an investigator supervisor at the Orange County Consumer Fraud Unit in Florida, told Marketwatch.“It’s happening to people who have been evicted and already are in a bad situation.”

The number of Orange County foreclosures has risen from 3,000 in 2005 to more than 24,000 today, according to Morales who notes that fraud cases pertaining to unauthorized rentals have increased as the economy has worsened.

Renters are challenged to research public records to insure advertisers are legitimate owners if they are not working with a licensed broker or property management company.