Observer investigation reveals how classified ads lure victims into a rent racket
Jamie Elliott and Graham Norwood
Online fraudsters are targeting British students and foreign holidaymakers by purporting to rent out property that does not exist. The scams work by offering to let property in prime areas at below market rents and asking for deposits, or in some cases full payment, upfront.
Police say they have received hundreds of complaints about online advertisements for flats. Potential tenants are persuaded to part with credit card details or cheques before seeing the property, which then turn out to not exist. And the payments are not returned.
Bethan Moore is studying for a master’s degree in London and pulled out of a rental deal when she became suspicious. She spotted the property on upad.co.uk, one of scores of websites carrying ads for student rooms, flats and shared houses.
“It was for a house in Clapham, and the monthly rent was scarcely half the normal price for the area. I thought it was an error but I emailed the landlord and he said it was correct. It all sounded fine at first,” said Moore, 20.
“But then there was a second email from him, asking me to prove I had the money for the deposit. He said he lived in Liverpool and he asked me to meet him half way, in Leicester, where I was supposed to hand over a £1,500 deposit. I didn’t even reply because it sounded extremely suspicious,” she said.
Moore reported her suspicions to Upad, which immediately removed the ad. Its chief executive, James Davis, said his service includes a facility for wary students to alert the site if a landlord appears bogus. “The ad is then temporarily removed for background checks to be undertaken. If it does turn out to be fraudulent it is permanently removed. We want to do as much as we possibly can to protect renters from potential fraudsters,” he said.
Not everyone is fortunate enough to spot the problem beforehand. Police say there have been reports of online fraudsters duping students out of money in Edinburgh, London and Liverpool.
Large classified websites such as Vivastreet and Gumtree have similar systems to Upad to investigate advertisements that arouse suspicion and also randomly check a proportion of their advertisers. But they say they are unable to check every property promoted on their sites.
Vivastreet carries an extensive list of scams which it says its users should beware of, including warnings about sending money before checking a property. “We advise only buying and selling with people you can meet. Fraudsters don’t meet people – that’s how they get caught,” a spokesman said.
Details handed to the Met
Tourists, too, have lost thousands of pounds through an internet fraud involving nonexistent holiday apartments. Holidaymakers from countries including the US, Australia and Malta have arrived in London to discover that flats they paid for in advance either have fake addresses or no connection with the website through which they were booked.
The accommodation has been advertised at highly competitive rents on websites including London Nice Apartments and London Summer Apartments.
The Metropolitan Police was given details of the scam in July but did not act until it was contacted by the Observer this month.
A number of victims have arrived at a genuine apartment block in Monck Street, Westminster, in search of a holiday flat in Monck Place, an address that does not exist. “These people get really upset when they realise they have paid a lot of money but there is nowhere for them to stay,” said the head porter of the legitimate block, who prefers not to be named for fear of reprisals.
“I felt especially sorry for an elderly American couple who came here with lots of luggage after they had paid a deposit and rent totalling $2,000 [£1,200]. The woman was in tears and they couldn’t believe what had happened.”
The porter passed to the Observer email correspondence between someone called Henry Boyate of London Nice Apartments and a Maltese woman who the porter says handed over £700 to the company in July.
Howard Elegant from Illinois booked a flat through London Summer Apartments in April for a spring break he was looking forward to spending in London with his wife and daughter. He too was contacted by Boyate.
“In emails this Henry Boyate encouraged me to use Western Union to transfer the rent and security deposit,” he said. “He told me it would speed up my reservation, but I opted for a wire transfer between banks because it was much less costly.”
On 20 April Elegant transferred £1,030, including a deposit of £300, to a NatWest bank account in the UK.
At this point he had no concerns and says there was a lot about the website that was very plausible. “I knew the area in which the apartment was supposed to be, and also thought I knew the building having found it on Google Maps,” he said.
The fraudsters had done their homework on rents. “We were looking for places around Russell Square and Kensington and the flats on the website in these locations were not ridiculously cheap but were good value, which attracted us,” he said.
Elegant became suspicious after Boyate claimed the money had not arrived and started demanding more cash. “He kept sending me emails telling me to use Western Union to send the money again and then asked for an extra £210 booking fee which I told him I wouldn’t send because it wasn’t part of the original agreement,” he said.
When Elegant checked with his bank in early May, it confirmed that the £1,030 payment had been credited to the NatWest account on 22 April. “I realised we had been conned and noticed other clues such as Boyate’s UK phone number which looked like a landline but was in fact a mobile phone.”
Attempts to retrieve his money failed. “My bank was very helpful and sent an inquiry to NatWest but by this time the account had been closed.”
No proof of address needed
On 14 September, the Observer was contacted by a man from Dublin, who prefers to remain anonymous and who was in touch with someone called Henry, this time from London Nice Apartments.
He was about to pay a deposit for an apartment but then spotted a note about the scam posted on the internet by this paper. “The pictures of the flats looked so attractive on the London Nice Apartments website and they only wanted £60 per night,” he said. “If I hadn’t seen your posting I would probably have gone ahead.”
The Observer made contact with Boyate last week by posing as a Dutch customer seeking to rent the apartment in Monck Place advertised on the London Nice Apartments website. We quickly established that cash paid by victims of the fraud has been changing hands in the UK. Boyate asked us to pay rent and deposit totalling £680 via Western Union which was to be collected in London by a Marie Petersen. “We strongly advise Western Union transfer from abroad because it’s fast and easy to use,” he said in an email.
Western Union does not ask for proof of address from recipients for sums of less than £2,000 and, according to corporate fraud specialist Raj Chada of law firm Hodge Jones & Allen, is well suited to the needs of international criminals.
“Money transfer organisations such as Western Union are frequently used by internet fraudsters, drug dealers or money launderers to move money around the world because there is a relative absence of safeguards, such as not requiring address verification for the transfer of smaller amounts,” he said.
A spokeswoman for Western Union said the company could not comment on specific cases of alleged fraud but was willing to co-operate with the police on any cases being investigated, adding: “On our website and in informational leaflets and posters available at all agent locations, we stress that our service should be used to transfer money to people you know, rather than to purchase goods.”
Boyate also sent the Observer details of an Abbey bank account in the name of Mr I O Ezeh. The fact that proceeds of a fraud are arriving in the UK can make all the difference to any prosecution.
“The problem with these cases is often jurisdiction. You have to convince a UK court that this should be dealt with here,” said internet law specialist Steve Kuncewicz of Ralli Solicitors. “This looks like fraud in the UK to us because the financial transaction takes place here – people are transferring their money either to a UK bank or to a Western Union branch in the UK.”
The head porter at the apartment block in Monck Street says he told the police about the fraud in July, by which time he had copies of emails from Boyate and a UK and international phone number the fraudster was using.
“I called Scotland Yard while a Maltese lady was with me whose cousin had paid London Nice Apartments £700,” he said. “I gave the police officer the website address, but they told me that the victim of the crime must report it to her local police in Malta.”
The porter heard nothing more from the police, so contacted the Observer about the con last month. “I wanted to see an end to this racket,” he said.
After the Observer contacted it, the Metropolitan Police got in touch with the website domain name registrar in the US, where the London Nice Apartments site is hosted and the website has since been shut down. A spokeswoman for the Met said it was also seeking to close an 070 UK telephone number used by Boyate, but did not have jurisdiction to stop a number registered in South Africa.
The Observer gave the police details of the Abbey bank account used to deposit victims’ money, but was told the police did not plan to take action with regard to this information. However, when we informed Abbey about the account, it confirmed that the account was active and immediately froze it. “Our investigations suggest the account is being used fraudulently and the account has therefore now been blocked as per our policy on first-party fraud/mule accounts,” a spokeswoman said. “If the police contact us, we will be happy to provide them with full details of the case to help with any investigation.”
Abbey says it may able to return deposits or rent that remain in the account to their rightful owners, but it declined to reveal how much money the account contains. “People who have been defrauded should contact the bank from where the transfer was made, which in turn will contact us to seek recovery of the funds,” the spokeswoman said.
• How you fallen victim to a letting scam? Let us know at email@example.com or by writing to Cash, The Observer, Kings Place, 90 York Way, London, N1 9GU.
Making sure it’s the real deal
How to avoid being conned if you are a student:
• Be wary of those adverts with no telephone numbers or where the only email address is a free one – Hotmail or Google – where you’re not sure who you’re dealing with
• Check the owner is on an approved accommodation list, usually operated by the college authorities or the local students’ union
• Make sure you visit the property with the landlord
• Don’t send money upfront without being certain the property exists or that the person has control of the property
• If you feel uneasy about the transaction walk away
How to avoid being conned if you are a holidaymaker:
• Don’t pay for services or goods via money transfer agents such as Western Union or MoneyGram
• Use a credit card for payments over the internet – this can provide insurance against fraud
• Be wary of UK phone numbers starting 070 – these can be routed anywhere in the world
• Google the name of the website or agency you plan to use plus the word ‘scam’ or ‘fraud’ to check its legitimacy