Every year, there is a scam that goes around college campuses that impacts hundreds of college students and young adults. Roommate scams, and if you're not careful, it could cost you hundreds (maybe even thousands) of dollars. We've talked about scams before, but this is a little different.
There are reports of the scam around major college towns across the country every year, including San Diego, San Francisco, Chicago, and New York. It also doesn't just hit college students, but also anyone who rents a room.
Here is what you need to know so that you can protect yourself from this scam.
How Roommate Scams Work
The scam works like this. The scammer posts listing on Craigslist and other websites advertising that there is a room for rent. Why this works great in college towns is because there are a lot of students who are looking for a room, not a full apartment or house.
After connecting via email through the website, the scammer meets the potential tenant at the room. They show them the room, tell them about it, and act like the landlord. The potential renter believes them because they have access to the unit.
When the renter likes the unit, the scammer tells the renter they would need to provide a security deposit and first month's rent, which is very common - so still no red flags. The scammer my even give the renter a receipt for the deposit and a key.
The problem comes on move-in day - the renter will find out that the scammer wasn't allowed to rent the room. In many cases, the scammer was the roommate who was leaving, and was trying to make some extra money. In reality, the landlord or owner had rented the room to someone else, and now the renter is out of a place to live and the money they paid the scammer!
What Recourse the Victim Has?
This is tough, because the victim really doesn't have any recourse if this happens. They rented the room from someone who was not legally allowed to rent it.
The best thing to do in this situation is to contact the police department or the local district attorney. They can help you file a report and maybe you have a chance to get your money back if they catch the person. However, that doesn't fix the current problem of trying to find living arrangements. Which can be challenging, especially if you need to start college classes soon.
The best way to protect yourself is to be vigilant from the beginning.
How You Can Protect Yourself When Renting a Room
There are several steps that you can take to protect yourself when renting a room so you don't fall victim to the college roommate scam. Most of it just involves doing due diligence. Here are some simple steps that you can take to make sure you don't get scammed.
Ensure You Know Who You're Meeting With
Make sure the person you're meeting with has the authority to rent the room. This is typically the owner of the house. If the person you are meeting with is a roommate or current tenant, ensure they have permission to rent the room by contacting the owner. Sometimes owners will allow their tenants to sub-let the unit, but many times they will not.
Not sure who you can contact? Check with your local county administration to see who the actual owner is. Many places have this online and you can simply search and see the public record. Other places require landlords to have permits. Just check to make sure that you're dealing with the appropriate person.
Meet the Roommates
Whenever you move into a place with roommates, you MUST meet the roommates. Just like you would never rent an apartment sight-unseen, why would you rent a place with people you've never met. While they may not be your closest friends, they are going to be people you interact with on a daily basis. There should be a basic level of connection when you go live there.
Pay With Check
I've written about how so few people still use checks, but this is one of those circumstances when writing a check makes sense. To deposit the check, the person will have to endorse it, which will give away their identity. Plus, the bank account will have their identity on file. If they go to a check cashing location, they will also need to provide ID. Finally, if there is something wrong, you can always cancel the check and get your money back.
Want more tips for college? Check out our 101 Tips For College Freshmen.
Have you heard of the college roommate scam? Any other steps you would take to protect yourself?
Editor: Clint Proctor Reviewed by: Chris Muller
Robert Farrington is the founder of The College Investor and is widely recognized as one of the nation’s leading voices on student loan debt and saving for college. He holds an MBA from UC San Diego Rady School of Management and has spent over 15 years researching, writing, and advising on student loans, 529 plans, financial aid programs, and saving and investing for young professionals.
Robert has been featured in the The New York Times, The Wall Street Journal, The Washington Post, NBC News, and Forbes, where he has been a regular personal finance contributor for over a decade. His work combines both professional expertise and personal experience – he successfully navigated his own student loan repayment journey and has helped thousands of readers do the same.
He is committed to making the intersection of personal finance and education transparent and accessible. You can learn more about Robert on the About Page or on his personal site RobertFarrington.com.