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December 31, 2006

Just When We Thought....

....we'd seen the last of the ilk of the Lads From Lagos, along comes a scam that's seen great success targeting naive, desperate and/ or just plain stupid landlords and potential landlords.

Now, it's part of my professional life to be aware of scams that a client needs to be protected against, but my area in that regard is mainly corporate -- I've never had a real estate client and until I bought my house back in January, had never executed a real estate transaction.

Having to relocate for business purposes but not wanting to sell my house, I ran ads in the Charlotte Observer and at Craig's List to rent it out. The only contact information I have included has been an email address. I've received several inquiries, including a number from overseas.

One of the first such contacts was an email from someone in Luxembourg, a man's name in the signature, a woman's as the owner of the email address. He explained that he is moving to Charlotte and in need of a place to live. I emailed him photos, he said it was exactly what he was looking for. Then he emailed that he would like to put up part of the deposit in advance, but that he needed most of what he had to pay for his travel, etc. He asked if he could send me the full amount of the 3 months' (1st, Last, security) deposit to show his good faith, and if I could then cash it, keep one month and Western Union the balance to a woman in Montreal, whose last name was Smith.


I emailed him back that this was a bit confusing. He replied that the woman whose email he was using and the woman in Montreal were one and the same, his wife, but that she used different names in the two countries. He would pay the other two thirds of the security deposit and furnish his credit report and references when he arrived in the U.S.

Needless to say, this all sounded just the tiniest fraction of a wee bit unconventional all around. I seriously doubted that this person was going to be my tenant (well, duh!). However, curiosity piqued, I emailed him where to send the money, informing him that I would neither wire the balance to Miz Smith in Montreal or make any refunds of any kind until the payment instrument had cleared at my bank and they had credited the money to my account. I also told him that I needed him to scan his passport and email it to me.

At least twice (by then, it was more a joke, something to amuse myself), I asked him where the passport picture was, and he was "scanning and emailing it now", but it never arrived, nor did a deposit. I wrote the respondent off as either a flake, someone who seriously needed to get his/ her affairs in order or a would-be scammer whose only barrier to success was a total absence of intelligence, and emailed him that I wasn't interested in any further correspondence.

Subsequently, I have received email inquiries from a "woman" in London and a "man" in Australia. The former claims to be a computer engineer, the latter a "straight, Christian male model" who hails originally from Spain. Both have emailed that they would like to send me the full deposit, then have me Western Union two thirds to third parties who will apply the money to the respondents' travel to the U.S. Each had a story, naturally, and each would pay the balance of their deposits and furnish their credit reports and references when they arrive in the U.S.

One thing that stood out in their correspondence was the fact that even though my ads indicated that I am renting out a 7 room house on 1/3 acre of land, their responses were either that they were interested in the APT for rent or the "room mate" availability. After having been emailed pictures and been told the nature of the rental, they all replied calling it the APT.

"Hmmmmm......" I thought, thinking about the respondent from Luxembourg, and not being a believer in coincidence, "Even though I haven't had any inquiries from Denmark, there's definitely something rotten there."

So I visited Google and typed in, "renter scams", and this item practically jumped out of the page at me.

"Durn!" I said (that wasn't actually the term I employed), and when I read the Laramie (yeah, Laramie, as in Wyoming) newspaper article linked at the site, I was surprised at how many idjits there are in the world.

I mean, somebody you've never met or transacted with before sends you a check, asking you to forward part of it on to a third party, or asks you for a refund right off the bat, and you comply before the check has even had a chance to clear?

Clarification: I was only momentarily surprised, then I remembered the success of the Nigerian scammers (see Lads From Lagos, up top) and even some really big scores from the days when I worked in the futures industry. One of my clerks had brought me an account payout request, from one of our smaller branches, for half a million bucks. On looking at the account, I saw that it was a new account with the opening funds in the same amount received only two days previously. The account had made money and the A/E had blown out all the positions, so the entire equity was available.

On calling the branch ops manager and asking him how the funds received had been received, figuring via a fed funds wire, I was shocked to hear that the money had come in the form of a cashier's check.

"Are you nuts!?" was my response. "Have you deposited the check?"

"Not yet," he replied.

"What bank does it come from?"

He rattled off the name of some bank I'd never heard of, explaining that it was in the Marshall Islands. When I stopped laughing, I told him to expect a wire shortly instructing that no further transactions of any kind were authorized for that account until further notice, then called around to friends and counterparts at other houses. I learned that the bank didn't exist, and that several other top brokerage firms had been ripped off for collective millions by these same scammers.

So yeah, my surprise at the number of people who get skinned by such scammers dissipated pretty quickly.

The easiest marks are those who allow wishful thinking to dominate over common sense. The broker who took on the scamming client saw more commissions coming out of a $500,000.00 account than from among a pool of clients who rarely had even ten per cent of that amount in house, and just as important, he envisioned being a heeeero in the branch office, eventually getting out of his cubicle and into his own office, with a "title" -- that's one way brokerage houses "stroke" their better producing A/Es. Branch management envisioned such accounts as putting their branch on the map. The scammer envisioned another in a series of gleeful laughs at "stupid Americans" and a visit to his offshore banker. The broker, the ops manager and probably the branch manager, unless he had some serious connections, would have been pounding the pavement had common sense -- me -- not prevailed in the matter.

The first time I ever received a Lads From Lagos email (some minister of education or other, after the former president had been beheaded, needed help getting twenty mill out of the country that he and the headless fellow had embezzled from the treasury and would cut me in on 20% for my assistance), being new to the Internet at the time, I forwarded it straight to the Bureau, and learned what the scam was about shortly thereafter. Man, I really could've used that four million, too (sigh)....

In the case of the rent deposit scammers, the hits are much smaller, but we're still talking significant money to a small businessman or someone like me, who is looking to rent out a single property. For example, let's say you have a unit for rent and are asking for a thousand a month, with a deposit in the amount of three months' rent. The scammer sends you a counterfeit cashier's or traveller's check, or a money order for three thousand and asks that you wire two thirds to a third party, or they send you, say, five thousand and ask, as a favor if you'll mail the two K extra to said third party, offering to give you some extra cash when they arrive, as well as the balance of the deposit in the first case. You deposit the payment instrument at your bank and wire the two thousand. A day or two later, they email you that they've had a change of plans or whatever, and want you to return their entire deposit, which could be either one thousand or three thousand, given the above numbers. Being an ethical person who believes everyone else is as honest as you are, you comply immediately. Having other things to do, you put it off for a day or two and suddenly learn from your bank that you've been ripped off. You're in luck! They only got you for a couple of thousand, plus the bouncing check fee the bank's going to charge you (And the banks were made of marble, with a guard at every door, and the vaults were stuffed with silver, that the people sweated for....).

Now figure that the scammer who hit you has used software that gathered a list of thousands of rental advertisers and emailed all of them. What, you have to wonder, percentage of these potential victims has been suckered? Like PT Barnum was credited with saying, "There's a sucker born every minute".

Brings to mind an old (is there any other kind?) Neil Sedaka song called Run, Sampson Run and the line, You can bet your bottom dollar he was gonna get clipped.

Everybody, Happy New Year!!!!

Posted by Seth at December 31, 2006 10:45 AM


Apologies...I don't have time to read this entire posting right now. I've got to hop into the shower to wash my hair. We're heading to the VFW to celebrate later.

But I want to wish you a Happy New Year! You're one of the good guys!

Posted by: Always On Watch at December 31, 2006 02:22 PM

AOW --

Happy and safe New Years to you and Hubby, as well.

Posted by: Seth at December 31, 2006 02:36 PM

So many variations on the same theme, but all scams have the baited hook - greed, trying to recoup a loss (the carnival game scam), or even appeals to heroism or civic duty - something to generate a "trap". Since we may be hit at a weak moment, it's good to have defenses set up in advance - and the best one (besides healthy skepticism) is to make the rule to take your time - don't get stampeded - so that you can breathe, think, and exercise due diligence.

Along that line, never make a payment (or authorization, release of financial information) when the request was not initiated by you, no matter have urgently you get pressed. Any legitimate request will still be available if you decide to call back (which gives you time to do your homework first). Communication with others, internet searches are key to due diligence, but of course you've got to give yourself time to do those.

I'm glad to hear you've got your head on straight.

I'm shocked that the kiting scheme was so successful; my investment company always puts a 10-day hold on incoming funds (even ACH transfers) before I could request to withdraw them. I'd thought such systemic precautions would be industry-standard.

In any case, a joyful New Year to you, Seth.

Posted by: civil truth at December 31, 2006 03:32 PM

Civil Truth --

This is an advantage of having spent a quarter century in the Protection Industry and previously a half decade in an industry where you accept a story, then break out the KYO-40 and ascertain whether a given transaction really occured.

If I ever allowed myself to be ripped of by the likes of any Internet scammers, my grandmother, who survived pogroms and lost her brothers to the Gestapo, would turn in her grave.

My generation and my mother's generation came into our own on a streetwise basis, with profoundly strong survival instincts.

And Happy New Years!

Posted by: Seth at December 31, 2006 04:09 PM

I don't remember such scams coming by way of mail, before the internet. Maybe I was too young, then. Although in college I did allow myself to get suckered by those "you're a winner" type mails, before I caught on. Wanted to kick myself in the pants...

If people would just exercise some common sense, there'd be no market for these Nigerian scams to keep growing and continuing. You'd think they'd figure out a way to improve their MO, as the mail is uniformly all the same format.

What are your thoughts on phishing?

Posted by: wordsmith at December 31, 2006 04:12 PM

Oh...happy new year, btw!

Posted by: wordsmith at December 31, 2006 04:13 PM

Wordsmith --

If it were up to me, phishing practitioners would have the skin peeled from their bodies both slowly and agonizingly, on national television. It really angers me to know that toilet scum is able to access and use personal information.

On the other hand, Happy New Years to U 2!!!! Not the band, though -- YOU!!!!

Posted by: Seth at December 31, 2006 04:59 PM

Isnt there a nice real estate company you can get involved with? Or a nice family with the last name of Nelson lol?

I sure hope you reported this.

I know now who I am going to contact when ever I have to handle my parent's property when they pass, and it will be YOU! I dont want to get caught up in any of this nonsense and I have no clue what I would be doing with THIER house!

Speaking of these Nigerian letters, lol, I just got one last week with the same old crap I had gotten from one last year, they wanted me to send money to help an abused unwed mother get away from her husband and make it to the United States, and could I send $5000.00 to someone somewhere I forget now but I answered with: "Are you friggen serious? I know this is a scam, and even if it isnt you would NEVER be able to get to the United States anyway with Homeland security not letting anybody in here anymore lol. (Giggle)

Never heard from whoever it was since.

These dopes need to get reported, however the last thing I ever forwared I got a visit from the Secret Service, but that's a WHOLE other story lol.

Great Post by the way, and Happy New Year to you too :-)

Posted by: MariesTwoCents at December 31, 2006 11:30 PM

Happy New Year Seth!

What would happen in you said yes to the scam and sent a phony check to the third party?

Wouldn't that just get their goat?

Posted by: Mike's America at December 31, 2006 11:32 PM

Marie --

The reasons I won't use a realtor for this rental are that a)I want to approve the tenant myself. While I am looking at my house as my home, to a realtor it's merely a "property", and b)I'm renting it furnished with a lot of luxuries included, and realtors here share access and alarm codes with entire networks of realtors, so I would have no control over or knowledge of who was in my house when I wasn't here.

From what I've read, this is becoming as common as the Nigerian scam, so I haven't bothered reporting it -- it would be like reporting a litterbug, or a Lad From Lagos. What I might do, though, is try to set one of these folks up so whoever tries to pick up wired money gets picked up instead. The scam is actually well thought out, though. The recipient could claim that he/ she had no knowledge that there was a forged payment instrument involved, and there would be no way of proving it was ever in his/ her possession, especially if the origin of the instrument was a different country. I believe that's why a third party is always involved in the scam: To shield the prime mover.

For the moment, I'm letting them know up front that I'll only accept exactly the full deposit, require a pic of their passport, will wire no balances anyplace and no refunds will be considered until after my bank has cleared the deposit.

A good rule of thumb here is not to consider anything but hard cash as real money. Until your bank has turned it into cash, it's just a scrap of paper. In the case of the cashier's check from the bank in the Marshall Islands, I had it FedEx'd to me, and it was very authentic looking, simply beautiful -- even the FBI agents who came to pick it up agreed, LOL.

Posted by: Seth at January 1, 2007 07:20 AM

Mike --

That would be just my style. :-) After the first couple of these emails arrive, they become easy to spot right off the bat.

Unfortunately, they always want refunds and so forth wired to them via Western Union, because they don't want their physical addresses attached to their counterfeit instruments. That's why, in letting them know up front that no funds will be returned until they clear at the bank, I also let them know that I will only remit to a physical address.

That kind of ends their interest in me...

Posted by: Seth at January 1, 2007 07:32 AM

Like you, I wonder how many are taken in by these rental scams. I wouldn't be surprised to learn that many fall for such wishful thinking.

We got home, safe and sound, last night. Not too many showed up for the party. Many had partied out the night before. Still, it was a good time with friends last night.

Posted by: Always On Watch at January 1, 2007 09:13 AM

Happy New Year Seth! Good luck on finding someone honest and trustworthy to rent to. I know there are plenty of honest people out there. Perhaps you would have more luck and less of a headache by placing adds in your local newspapers.

I was targetted myself just a couple of weeks ago. Some scammers posing as the Reader's Digest Sweepstakes people, and they sent me a check for $10,000... proclaimed me a winner, and gave the name of a bank in Florida, which I immediately called. The woman at the bank who answered said "I'm so glad you called. We're being flooded with these phony checks." Evidently, I was supposed to send the check into the bank, then call them to claim the remainder of my winnings of $500,000, but the phone call would have cost me several hundred dollars to make. First of all, I don't mess with the Reader's Digest Sweepstakes at all, so how could I win it? If I did mess with it, that's not how Reader's Digest notifies people in the first place, but it seems there are a lot of people falling for this one. I reported it to my local newspaper and they did a write-up about it. It seems I'm the first one to have been hit with this particular scam in this area who bothered to report it.

In this day and age we must all stay alert, and aware that "if it's too good to be true, it usually isn't."

Posted by: Gayle at January 1, 2007 09:24 AM

Eighty percent of my time at work is spent analyzing this stuff, reporting, and countering it. Internet scams have become a full time job for a lot of us, and the amount of people falling for it entices even more creativity on the part of the perpetrators. It's only going to get worse. Great post, and it will only drop off when people stop parting out their money to these idiots.

Posted by: ABF at January 1, 2007 09:54 AM

AOW --

There is a wide abundance of people who live to be victims, and the Internet is a great medium for those who wish to accommodate them.

Glad you had a good time -- sometimes less crowded can be more fun. I had my 2 colleagues + 1 down here for New Year's Eve, we partied rather heavily. They're headed back now, and I'm catching up emails and so forth. Strong coffee is my friend. :-)

Gayle --

I have one local newspaper ad and one at Craig's List. I thought I had a tenant lined up and turned away a few others(I don't like to keep people hanging -- unless they're Husseins --, so I let the other respondents know so they could continue their searches) then the one I had flaked out on me. Hate when that happens. I'm hoping to have more people respond after today, now that the holiday season is ending.

I never do sweepstakes or play the lottery or anything. I remember going into a small Arab grocery store in San Francisco to buy a pack of cigarettes, and the old man of the family, sitting behind the counter, pointed at the lottery set-up, smiled and said, "Sebenty nine meelion!"

I smiled back at him and said, "Good odds, seventy-nine million to one!"

I occasionally receive telephone calls from recordings that tell me to call other numbers, which I don't. I've thought those could be along the same lines, where the number you call is one of those that charge you high sums based on how long they can keep you on the phone, like those 900 numbers.

Reader's Digest, LOL. The publication that spends most of its time in bathrooms.

I fully agree with you on staying alert and the maxim "if it's too good to be true..."

AB --

So you're in the thick of it, you must see some real doozies! Being on the physical security end of my industry and earning my living thoroughly assessing clients' vulnerabilities, I can sympathize. Most people have no idea how expensive, in terms of technology and man hours, it has become for businesses to protect themselves.

Posted by: Seth at January 1, 2007 11:09 AM

Yes, there is a sucker born every minute, and con-artist is born every second. Honest people really need to be cautious.

Posted by: Shoprat at January 2, 2007 08:39 AM

Shoprat --

Too true.

Since learning about the renter scam, I've spent some time surfing around and found websites dedicated to exposing all sorts of scams, and found sites that fully dissect some of them. Basically, every single piece of spam one receives that has anything to do with any kind of income is a scam, yet there is no shortage of suckers, to judge by the number of these rip-offs.

Posted by: Seth at January 2, 2007 09:26 AM


I occasionally get email scams telling me that someone needs my help by accepting some check from a foreign bank, blah blah blah...

Unfortunately many of these scams feed on people's greed, which get the better of their brains.

Have any luck renting it out yet? Wish I knew someone who was looking for a place in Charlotte. I'll keep my ears and eyes open!

Posted by: atheling2 at January 7, 2007 12:09 PM

Seth, I love reading your posts like this. Makes me laugh, and laugh, and laugh. Happy New Years buddy and thanks for all the help, the prayers and the kindnesses unlooked for. You truly are one of the Good Guys!

And Yeah, I Still Think Cancer Sucks!!! :-)

Posted by: GM Roper at January 7, 2007 02:03 PM

Atheling2 --

Welcome back, and happy New Year!

A friend was telling me yesterday that he saw something on TV where they were talking about how there are enterprises in Nigeria where roomfulls of people report to work on a full time job basis where they do nothing but send scam emails, and that it's considered respectable work.

The last scammer that sent me an email claimed to be a doctor from England currently working in Lagos, LOL. Nobody in his/her right mind who sees Nigeria in an email would take it as anything but a scam, which has to be a terrible inconvenience for any honest Nigerian attempting to conduct legitimate business via the Internet.

I still haven't found the right tenant, though I've had several replies and viewed a number of credit reports. Bummer.

Posted by: Seth at January 8, 2007 04:42 AM

GM --


I enjoy relating out-of-the-ordinary experiences like these, especially if they may serve as a heads-up to readers who may run into similar situations.


Posted by: Seth at January 8, 2007 04:50 AM