Nigerian rental loan scam snags unsuspecting tenants

Many loan offers that look immediately like a scam to most consumers are still profitable enough to perpetuate the illicit activity. Consumer information and advocacy websites, including this one, are frequently targeted by spammers who solicit “loan transactions” from unsuspecting tenants who are often desperate and left with few options.

How it Works

Con artists will typically pitch loans to tenants who need money to cover a late rent payment or the security deposit for a new apartment. Sometimes these offers come through email. Other times they show up as comments left on consumer advocacy websites similar to this one. It is up to the organization running the site to ensure that the spam never makes it to public view. Similarly, many common email providers utilize spam filters to try and weed out all of this spam. Some of it may cleverly make it through.

What these messages have in common is a suggestion that you have a better chance at a rental loan approval through them than through normal means. When banks say no, these scam artists remain quite optimistic that a loan application will be approved. They initially only ask you for your contact information to get started. That is when the con gets started. Ultimately you will be asked to wire money through Western Union or some other anonymous means as a loan fee, only to be disappointed when you are left penniless with no loan proceeds.

Sometimes they request your bank account information to deposit the loan funds directly into your bank account. Only no deposit occurs. Instead, a withdrawal will empty your account before you have time to pick up the phone to call your bank.

Rental loan scams can and do originate from anywhere. They seem to be most effective when done from overseas where there is much less scrutiny from the FBI and other law enforcement agencies. A large percentage of this scam originates out of Nigeria, where the scam has received its name, the Nigerian rental loan scam. It is also referred to as the 419 scam, since that is the Nigerian Criminal Code article for fraud. Regardless of the origin of each scam, it is often difficult to tell where the scammer actually lives. They often utilize internet cafes and proxy servers in order to remain anonymous.

The Nigerian Scam

The Nigerian scam is not limited to just Nigeria. Nigeria does get credit for the scam largely because of the story that scammers relied on to prey on victims.

Scam victims were told a story that implied that they might be entitled to a portion of the wealth from a Nigerian prince. Others were promised that they won an international lottery and just need to send payment to cover the tax. All are a scam.

Why it Still Works

Despite efforts by law enforcement agencies to stamp out the Nigerian scam and other rental loan scams, some activity is still lucrative enough to perpetuate the scam. Spam filters cannot weed out 100% of spam from email and website comments.

Spammers will often misspell one or more words. While this may have originated from bad English, it has proven to be quite effective for two reasons.

First, it is more difficult to detect spam when certain hot button words are misspelled. Many of these messages can slip through.

Second, using poor spelling weeds out the smarter readers that are less likely to fall for the scam. All that are left are gullible and vulnerable victims that are more likely to result in money being transferred to or stolen by the scam artists.

Protect Yourself

We take meaningful measures to protect our fellow consumers from scams like this. We utilize powerful spam protection filters to ensure that spammers have a very difficult time getting a rogue solicitation through on our website. We manually squash the rest. Additionally, we try to educate our clients on how to protect themselves from these illicit activities.

Ultimately, by sticking with traditional rental loan outlets such as banks or credit unions, you can borrow money without fear of getting scammed. If your credit stinks or you need rental assistance, then you can find an interest-free loan or grant to cover your rent payments or security deposit. These are offered by nonprofit organizations near you that help to protect people like you from evictions and homelessness.