FTC, States Settle With Rental App for $1.6M Over Fraud Claims

The owners of Roomster will pay $1.6 million to settle allegations they misled consumers seeking affordable housing by paying for fake reviews and charging for access to phony listings, the FTC and states attorney general announced Monday (see 2208300051). The commission authorized the settlement with a 3-0 vote. The amount is due to AGs in California, Colorado, Florida, Illinois, Massachusetts and New York, who 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, the agency alleged. The proposed order included a $36.2 million monetary judgment and $10.9 million in civil penalties to the states. Roomster and its owners will pay $1.6 million to six states due to the defendants’ “inability to pay the full amount.” the FTC said. “If Roomster and its owners are found to have misrepresented their financial status or to have violated the terms of the order, the full amounts would immediately become due.” Schriber and Zaks are permanently banned from buying or incentivizing consumer reviews. “Our coalition’s investigation revealed that Roomster was, in simple terms, conning people seeking rental housing,” California AG Rob Bonta (D) said. The “last thing renters need is to be scammed by fake reviews and apartments that might not even exist,” New York AG Letitia James (D) said. Attorneys for Roomster didn’t comment.