There’s a sucker born every minute, but only since 1995 has Craigslist been around to get us all in the same place. A new study by New York University’s school of engineering finds that nearly one-and-a-half percent of housing ads on the San Francisco-based classifieds site are scams, and that more than 50 percent of fraudulent ads slip under Craigslist’s radar.
The paper, Understanding Craigslist Rental Scams, critically examined over two million ads in San Francisco and 19 other cities over a roughly five month period in 2014. 29,000 of them were deemed probable fakes.
The most common form of Craigslist con is the needless credit report. Scammers create a fraudulent ad, probably for a real property but not one that the scammer owns or manages, and then direct interested parties to purchase a credit report from a dubious agency in cahoots with them. The credit agency collects a sale, the scammer gets a commission, and you end up with a report you didn’t really need, and which may or may not be worth anything at all.
A scheme familiar to any Craigslist veteran is the cloned ad: Fraudsters copy and paste a legitimate ad and then lower the price to attract credulous clicks. If anyone shows interest, scammers request a money transfer to cover the deposit.
Beware also of fraudulent retail services, which convince you to buy access to a newsletter or mailing list of foreclosure properties and other potential bargains. This is something real retail services offer all the time, but in this case the list you get is full of fake listings for properties that might not even be for sale.
With 80 million new ads a month, Craigslist relies on its users to be vigilant about sniffing out suspicious ads and flagging them. But the NYU team found that only 47 percent of suspicious ads ended up flagged in the study period, and on average it takes 13 hours for users to report a phony ad. Craigslist removed 87 percent of shady ads that were eventually flagged, on average 10 hours later.
The university plans to bring the findings to the FTC and major credit card companies, and to study Craigslist scamming in other countries in the future.