Unanimous FTC, States Sue Roomster for Alleged Fake Reviews

Roomster misled consumers seeking affordable housing by “paying for fake reviews and then charging for access to phony listings,” the FTC said Tuesday in a lawsuit filed with six states against the online rental platform. The commission authorized filing the complaint with a 5-0 vote. Attorneys general in California, Colorado, Florida, Illinois, Massachusetts and New York signed the complaint. Roomster and owners John Shriber and Roman Zaks took “tens of millions of dollars from largely low-income and student prospective renters who need reliable housing the most and can least afford to lose money,” the agency said. Enforcers filed a separate lawsuit against Jonathan Martinez, who they claim sold Roomster “tens of thousands of fake reviews.” Martinez reached a $100,000 settlement that requires his cooperation with the investigation. Since 2016, the platform and Martinez flooded the internet with “tens of thousands of fake positive reviews to bolster their false claims that properties listed on their Roomster platform are real, available, and verified,” the FTC said in its complaint, alleging the defendants “have taken in excess of $27 million from consumers.” The complaint seeks civil penalty awards in various states ranging from $2,000 to $50,000 per violation. “There is a term for lying and deceiving your customers to grow your business: Fraud,” said New York AG Letitia James (D). “Roomster used illegal and unacceptable practices to grow its business at the expense of low-income renters and students.” Roomster and an attorney for Martinez didn’t comment.