By Roomster, an online apartment-finding service, has recently come under fire for engaging in fraudulent practices. The company has been accused of using a fake-listing and review scam to deceive desperate, low-income renters in search of a place to live.
In a settlement reached with the Federal Trade Commission and the attorneys general of six states, Roomster’s owners, John Schriber and Roman Zaks, admitted to paying for tens of thousands of fake positive reviews. Their aim was to manipulate app store rankings and deceive potential customers into believing their service was trustworthy.
Additionally, Roomster created phony apartment listings to attract unsuspecting renters. This elaborate scheme allowed the company to increase its presence in the market and draw in more customers.
Consequently, Roomster has been slapped with a hefty $36.2 million fine, accompanied by civil penalties amounting to $10.9 million. However, the FTC and related states have agreed to suspend these penalties on the condition that the company pays $1.6 million to the affected states. This leniency is granted due to the fact that Roomster and its owners are unable to fully cover the fine.
Nevertheless, there is a provision in the agreement that stipulates if Roomster fails to make the $1.6 million payment or if it is discovered that the company misrepresented its financial situation, the full penalty will be reinstated.
This settlement serves as a significant blow to Roomster’s reputation and underscores the importance of due diligence when searching for an apartment online.
Roomster Accused of Deceiving Renters and Posting Fake Reviews
The popular housing platform, Roomster, has come under fire for allegedly deceiving and misleading renters. The company is accused of using fake reviews and posting non-existent listings to lure unsuspecting apartment hunters. The attorney general for New York, Letitia James, called out Roomster for taking advantage of the housing crisis and preying on vulnerable students, young adults, and low-income renters.
In a joint effort, several states including California, Colorado, Florida, Massachusetts, and Illinois have joined forces to take legal action against Roomster. The lawsuit alleges that the founders of the company, Schriber and Zaks, purchased a staggering 20,000 fake 5-star reviews from a deceptive review mill. The intention was to create an illusion of credibility and to suppress negative reviews exposing their fraudulent practices.
Moreover, the lawsuit claims that Roomster flooded its platform with phony listings for apartments that did not exist. This strategy was used to make their service more enticing to potential renters. Surprisingly, the company made minimal efforts to verify the authenticity of these listings or the legitimacy of those posting them.
Even more troubling is the fact that Roomster failed to remove a fake listing that was created by undercover investigators. The listing used the address of a post office building and remained on the site for months without any scrutiny or questioning.
The attorney general’s office emphasizes that Roomster’s actions have added unnecessary stress to an already burdensome process of searching for an apartment. The victims of this scam deserve better – they deserve a fair and transparent housing market.
We reached out to Roomster’s attorneys, Schriber and Zaks, for comment but have yet to receive a response. While the investigation continues and legal action is taken, it is clear that Roomster’s deceptive practices have had a significant impact on countless renters across multiple states.
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