FTC says deceptive rental listings are nothing to write home about

As the song goes: “A house is not a home.” Sometimes an apartment isn’t an apartment, as alleged in the Federal Trade Commission’s lawsuit against the operator of a rental listing website.

Steven Shayan, Kevin Shayan and affiliated companies operate ApartmentHunterz.com, FeaturedRentals.com and WeTakeSection8.com. For consumers who pay a weekly or monthly subscription fee, the defendants promise to provide an accurate list of available units.

For example, ApartmentHunterz.com claims that its “unique, date-sensitive rental software updates listings daily, so the data you receive from us is the most accurate and up-to-date information on the web today.” The site advertises “instant vacancy rentals Listings,” claiming to offer “over 1,000,000 ads updated hourly” and “over 15,000 exclusive vacant and upcoming listings, allowing you to find the apartment or home of your choice within 3-5 days.” There’s no need to worry about outdated information, the website assures potential tenants. The company uses “phone and email verification to remove rental listings and verify price changes, and posts new rentals hourly as they become available.”

FeaturedRentals.com echoes these claims of accuracy, placing special emphasis on the quality of its listings. Unlike “free websites or the Yellow Pages, which only list neighborhoods that may not have vacancies,” FeaturedRentals.com describes itself as “a reputable rental website” that gets its information “directly from landlords and management companies,” verif[ies] property availability” and then “updates its search engine daily and hourly. “

Available units may be particularly difficult to find for older and disabled consumers who qualify for Section 8 housing assistance and for very low-income households. But WeTakeSection8.com bills itself as “the largest Section 8 apartment finder in the country” and “one of the newest rental websites” that is “set up to accept vouchers.” Why subscribe to WeTakeSection8.com? Because unlike sites that contain “old listings that have long been rented,” WeTakeSection8.com claims to offer “thousands of updated and verified listings, including exclusive listings not found on free sites.”

But according to the FTC, the defendants’ websites were riddled with inaccurate or unusable listings. Hundreds of consumers and property managers filed complaints directly with the defendants or through groups such as the BBB. Among other things, they reported that the units on the site were not really for rental. We’re not talking about, “Oh my god, damn it.” Someone just signed a lease this morning, “near miss.” Consumers and property managers reported that apartments featured on defendants’ websites had been rented months or even years ago.

Additionally, the FTC claims that many listings on WeTakeSection8.com do not actually accept Section 8 coupons. Anyone who pays a subscription fee for a service that doesn’t deliver as promised suffers a financial loss, but it eats into the budgets of low-income consumers who qualify for Section 8. According to the indictment, the defendants’ conduct also harmed these consumers in another way. People with disabilities or low-income families can spend years on the Section 8 waiting list. But once they qualify for a voucher, they may only have 60-90 days to find a place that meets Section 8 requirements. Time spent on dead ends – for example, pursuing a listed property that isn’t actually available – shortens this narrow window.

The FTC lawsuit alleges, among other things, that defendants’ claims to provide accurate, current and usable listings were false or deceptive. The complaint also challenges the defendants’ assertion that their website “exclusively” lists available apartments and Section 8 units that are not available on the free website. Additionally, as the FTC lawsuit points out, this is not the first time defendants have brought condemnation over rentals. The California Department of Real Estate revoked ApartmentHunterz’s license, but it continues to operate. Then there were earlier state disciplinary actions for false and misleading advertising.

A California federal court has issued a temporary restraining order.

What words do other businesses use to describe them? Even at this early stage, the complaints are a reminder that companies have a legal obligation to live up to the promises they make in their advertising. This can happen if they sell widgets and gadgets, or if their inventory is paid access to curated information. If you process data, established truth-in-advertising standards still apply.