Consumer Alert: Company that the NY AG says defrauded renters of tens of millions of dollars was operating in Rochester
ROCHESTER, N.Y. (WHEC) — I’ve done a series of investigations on the rental crisis in Rochester. According to a recent study commissioned by the city, half the rentals in Rochester are substandard.
Local advocates tell me renters are vulnerable to scams and landlord maltreatment. But Tuesday we learned the New York State Attorney General is taking action against a Manhattan company she says has scammed potential renters out of tens of millions of dollars.
I learned this company is operating in Rochester. And that means people right here in Rochester may have fallen victim. I’ve read the entire 36-page lawsuit, and it is troubling. it says a Manhattan company called Roomster claimed to give renters access to accurate and verified apartment listings, room rentals and roommate requests.
But instead, the lawsuit says it was a haven for scammers who took people’s deposits for apartments that didn’t exist. And to attract unsuspecting victims, the lawsuit says Roomster flooded the internet with fake reviews. It has been a very difficult environment for renters across the country, and that’s especially true in Rochester.
Skyrocketing rents and low availability of quality housing have been a Rochester renter’s nightmare. That’s why a service like Roomster might seem like a valuable service. Its sleek website boasts rooms for rent in cities across the globe, including right here in Rochester. The site has postings for 29 rooms with attractive pricing, a renter’s dream. But immediately there are red flags. I found a posting for a room for $5 a month. I also found a home for rent for $117, allegedly with an immediate move-in date.
But in this lawsuit, The Federal Trade Commission, along with New York Attorney-General Tish James and attorneys-general from five other states allege it made users pay to have access to listings it said were authentic. But the lawsuit says, “In reality, the Roomster defendants do not verify listings or ensure that their listings are real or authentic.”
In fact, undercover investigators posted a fake listing and an address, but the address was actually a U.S. Post Office. The lawsuit says the fake listing was on the site for months and Roomster never took it down. What’s worse, the lawsuit says Roomster paid a service to saturate the internet with tens of thousands of 4 and 5-star fake reviews.
So the lawsuit is asking for a permanent injunction, essentially shutting the business down as well as a boatload of civil penalties and restitution for injured consumers.
In a statement, Roomster said the accusations have no merit and “represent another example of the FTC’s overreach.”
If you believe you may have been defrauded by Rooster, the New York Attorney General wants to hear from you. You can file a complaint by clicking here.