Looking for an apartment to rent? Now there’s another thing to worry about besides the location and price.

The FBI released a scam alert recently announcing that Nigerian scam artists had been placing phony ads for rental property online, most notably in Craig’s List.

The ads sound good: the apartments advertised are very cheap and well-located. The transaction takes place online, with the “listing agent” encouraging would-be renters to secure the unit immediately with a deposit of two months’ rent.

Apparently hundreds of tenants have sent in their deposits, and provided personal finance information, like social security numbers, phone numbers, names and addresses – everything a listing agent would need to qualify someone to rent a property.

The only trouble is that often times these ads were scams – and renters have not only lost their money, but have turned up on the doorstop only to find out that either the apartment building didn’t exist, or if it did exist, there was no record of the tenant.

I talked about the FBI scam alert on a recent radio show and immediately heard from two people who had fallen victim to the scam.

Nance wrote that she is “embarrassed to admit that I fell for such an ad for a Boulder, Colorado rental. I stupidly gave all of the information asked for in the email, including my credit score. I’m now sick with worry that something could happen. I have been checking daily my VISA card status, but wonder if you have any other suggestions.”

Daniel also wrote that he fell for this, and wound up on a street in Washington, D.C. in the pouring rain, his luggage at his side, without a place to live. He crashed with a friend for a couple of weeks, while he lined up a legitimate apartment rental.

The FBI says the rental scam problem has become so prevalent in Charleston, Columbia, and Hilton Head that South Carolina, that FBI Special Agent in Charge David Thomas recently issued a warning about it to homeowners and prospective renters. Prospective tenants have also been victimized in Rhode Island, Illinois, Colorado, and California, among other states.

How can you protect yourself? According to the FBI, you should only deal with landlords or renters who are local. Be suspicious if you’re asked to use a wire transfer service to send cash. Beware of email correspondence from the “landlord” that’s written in poor or broken English (think about how poorly written most phishing emails are). Research average rental rates in the area and be suspicious if the rate you’re being offered is significantly lower. And, never give out personal financial information, like your social security number, bank account information, phone number, current address or credit history or score.

If you receive an email inviting you to work with a real estate agent, most states require real estate agents to be licensed, so you can look up that agent’s license status and determine if he or she is legitimate. You should also confirm a phone number for that rental agent and make sure that the office is actually located where they claim by calling the managing broker of that leasing company.

What should you do if it’s too late and you’ve already fallen for the scam?

  1. Report all information to your local FBI office. They’re continuing to track information as they continue with dozens of investigations across the country.
  2. File a fraud alert with one of the three credit reporting bureaus (Experian, Equifax, and TransUnion). They will spread the fraud alert to the other credit reporting bureaus within 48 hours. This should help protect your credit history and credit score.
  3. Report the scam to your local police. File a police report, which you’ll need to continue your fraud alert. You may also need to report the scam with the authorities where the property you were attempting to rent is located.
  4. Freeze your credit history. You can do this for a flat fee. There are problems and annoyances with a credit freeze, however, like you’ll have to pay to unfreeze it.
  5. Report the scam to the FTC.gov. File an online report so that the federal government can track the scam.
  6. Call your credit card company’s fraud division (use the toll-free number) and change the numbers on your accounts. This is a very good way for the credit card companies to track what goes on with your account.
  7. If you gave any checking or savings account information in the scam, call you bank. You may want to change your account numbers for your checking and savings accounts. Contact your bank’s fraud department for assistance.

Take a look at our other stories on SCAMS and also the most recent information on IRS scams.