Rental scams on the rise across Canada as competition for housing increases

Soaring rent prices and increased competition lead to a 15% increase in rental scams

Vancouver, British Columbia, CANADA


VANCOUVER, British Columbia, Aug. 16, 2022 (GLOBE NEWSWIRE) -- This year’s historically busy renting season has been fraught with an unprecedented number of rental scams, creating additional risk for renters who are already under pressure to find housing. Compared to June 2021, Vancouver-based rental platform liv.rent has seen a 47% increase in rental activity on their platform during June 2022. Meanwhile, reports of suspicious listings have nearly tripled from the previous year, as can be seen from a feature that allows users to flag suspicious activity on the platform. With students starting to return for the upcoming fall semester and 432,000 new permanent residents expected by year-end, there is an urgent need for Canada’s rental industry to take action to safeguard vulnerable renters.

“Scams and fraud are my biggest fear when renting in Canada. I haven’t personally encountered any scams, but I have heard stories from friends where they sent a security deposit for nothing.” - John Harding, liv.rent renter*

A growing threat

Canadian renters are increasingly having to exercise caution when renting online as rental-related scams sweep the country. Soaring interest rates and low supply have led to high rent prices and even more fraught competition for units, compounding the danger to tenants. Opportunistic scammers are more prevalent now than ever, costing Canadian renters 12.3 million dollars through merchandise scams—which include rental scams—in 2021, according to the Canadian Anti-Fraud Centre.

“Throughout my housing search, there were multiple instances where I felt uneasy or uncomfortable when communicating with potential landlords/agents. When I was looking for listings, demand was high and competition was tough. Speaking from personal experience, some situations required me to provide sensitive personal information, with no guarantee that it would be protected.” - Michele Hunter, liv.rent renter*

Rental scams to beware

As the rental industry continues to move online, scams have become more sophisticated and more varied. Fake profiles and listings remain the root of the problem, but recognizing and avoiding them is often difficult for renters. Blurry listing photos, obscured address details, and urgent demands for personal information or cash deposits are all tell-tale signs, but are easy to miss without careful attention.

One incident, reported on by CTV News Toronto, involved a listing on Kijiji that attracted attention after several tenants submitted cash deposits to a fake landlord, only to be asked to leave the following day by the real homeowner. With rent prices soaring—a one-bedroom, unfurnished unit in Downtown Toronto now rents for an average of $2,140 per month—a scam like this could cost renters over $4,000 if they pay the first and last month’s rent upfront.

Much-needed measures

Current measures taken by Canada’s rental industry are proving effective in the fight against rental scams, but further steps are still needed to adequately safeguard renters. As it stands, a number of rental platforms have processes in place to delete user-reported listings, with many also providing educational content and warnings to users about rental scams. These efforts largely fail in proactively addressing the root problem though, as 43% of Canadians encountered fake ads, according to an article from CTV News Vancouver – making clear the need for further safety measures and additional efforts to warn and educate renters about the dangers of rental scams.

In response to this, one Canadian rental platform has taken decisive action to combat rental scams by verifying both landlords and listings. liv.rent manually confirms landlords’ identities through user-uploaded photo ID matched against a selfie, with renters able to immediately see that they’re dealing with a real person through verified badges. Similar measures are taken for properties, with landlords asked to either submit ownership documents or enter a one-time code mailed to the address provided.

"Unlike Craigslist, which is full of scammers, liv.rent has only verified listings and a wide range of filters that allow you to specify pretty much anything you want in a place to live. liv.rent is the quickest and most useful website to find a rental that I have ever used.” - Brian Jones, liv.rent renter*

Measures such as these have proved to be an effective tool in combatting rental scams and protecting tenants and go a long way towards rebuilding trust and transparency in Canada’s rental process.

Awareness only the first step

Canadian renters are becoming increasingly aware of this dire situation as rental scams become nearly unavoidable. With rising interest rates making homeownership in Canada inaccessible to many and the country welcoming large numbers of immigrants in the coming years, the country is currently seeing unprecedented demand for rental housing. Safeguarding vulnerable communities and ensuring newcomers to Canada aren’t greeted with costly rental scams should be a priority for every listing website operating in the country.

Verified landlords and listings are a step in the right direction and have already proven to be a hit with users. According to liv.rent data, over 70% of renters searching choose to click into verified listings as opposed to unverified listings in the past year – showing that measures such as these are proving effective in the fight against rental scams. However, further measures and broader education efforts are still needed to ensure that every Canadian has the tools to recognize and avoid scams. As awareness continues to grow, Canadians are seeking safer methods of searching for housing, with a 27% increase in renters clicking into verified listings on liv.rent between May and June 2022.

“The fact that landlords have to verify their legitimacy to protect renters from scams is really reassuring for potential tenants.” - John Harding, liv.rent renter*

While the country’s rental platforms continue to develop new methods of promoting transparency, Canadian renters are encouraged to remain vigilant and educate themselves in order to quell the growing threat posed by rental scams.

About liv.rent

Since launching in 2018, liv.rent has been a leader in the rental industry, transforming the way Canadians rent with the integration of technology and innovative safety measures. By automating every step of the rental process from searching for listings to contract signing, this platform has grown to create a safe and trusted community of landlords and renters. From liv.rent’s inception, strict verification processes for both landlords and listings have been a core part of the platform.

*Names of liv.rent users have been changed to protect their anonymity. Contact information is available upon request – please email media@liv.rent.

Matisse Yiu
Marketing Manager
liv.rent
media@liv.rent