Fraud risks lurk on the internet, but then again, free is free

Propagandists pigeonhole you and sway your opinion, hackers steal your identity and ruin your credit, and scammers steal your photos and rent your investment property from underneath you.

John and Terri Parmerlee have discovered firsthand that the internet is a lawless place. And worse, the authorities are incapable of reining in fraud, and major corporations refuse to try.

The Parmerlees moved to Texas last year to live near their daughter in Kingwood. They bought a rental property near their new home in Porter to help finance their retirement and posted an ad on Craigslist.

“We’ve sold houses, we’ve rented out houses, and we were landlords for three years in Orlando,” John Parmerlee told me. “We got a call a week ago from a woman who said: ‘You’ve got two different prices on your house, and two different sets of phone numbers.’ ”

Parmerlee checked Craigslist, and sure enough, someone had taken six of their 14 photos and created another post. Only this ad said the home was furnished, allowed pets, had more square feet and was available for a much lower rent.

“I’ve heard stories before of stuff with Craigslist, but we’ve never had any problems ourselves,” he said.

Recognizing that the ad was fraudulent, he hit the “Prohibited” button at the top of the page.

He mistakenly thought that would solve the problem.

“When you hit prohibited, it hides the ad from you, but it’s still there for everyone else to look at. That doesn’t solve anything,” he said.

Surely an email to Craigslist customer support would solve the problem, he thought. All he got was a canned response, which explained that since it was a free ad, Craigslist would not do anything about it.

The Craigslist press office did not respond to my repeated emails over five business days

requesting comment.

Meanwhile, more fake ads offering to rent Parmerlee’s house appeared. And prospective renters, answering the false ads, started showing up at the house.

“They send people out to the house to look at it,” said Parmerlee, who lives down the block from the rental.

One prospective renter said a man with a South Asian accent claimed to be a doctor working in North Carolina who needed to rent the house. If the man liked the house, a deposit sent via money transfer would get him the keys.

Since trying to rent something you don’t own is a crime, Parmerlee called the Montgomery County Police.

“They basically said they are not going to do something until somebody loses money,” he said. “They don’t consider it a crime to run a fraudulent ad.”

That’s when the Parmerlees called the North Carolina phone number listed on one of the ads. A man with a South Asian accent answered the phone.

“He started interviewing me, with my wife right here, asking me questions about why did we want to move there, but he didn’t ask about income or anything like that,” he said. “I heard people in the background. It sounded like what they call a boiler room.”

A boiler room is an old term for an outbound call center where salespeople or fraudsters sit crowded together under intense pressure to make sales or hook victims. When Parmerlee commented on the background chatter and mentioned that he was on a speakerphone, the scammer hung up.

When Parmerlee looked to see if scammers were spoofing other rental ads, he found dozens of examples in dozens of cities.

“These people have to be making money,” he said. “Otherwise they wouldn’t be doing this.”

Parmerlee is right. There are enough people answering these online ads to finance a team of con artists and their internet-connected boiler rooms in distant countries. This trick is almost as old as Craigslist itself, yet still works.

On a scam warning page, Craigslist recommends only finalizing deals in face-to-face meetings. But the 71-year-old Parmerlee is worried about a victim showing up at his property with a moving van.

“They do get a few suckers in, and they are going to show up angry. There are going to be confrontations,” he said.

Parmerlee has put signs in the windows of his property warning prospective renters about the scam. But he’s disappointed no one will help him address the problem.

The moral of the story is that you get what you pay for. Use a free and open service like Craigslist, and you can’t expect customer support. And you can’t be surprised to discover that you are rubbing shoulders with cyberspace criminals, who run thousands of scams on the service.

Does this experience change Parmerlee’s mind about using Craigslist? No.

“I think they could be more proactive,” he told me. “But there are scams with everything, no matter what it is.”

Free, it seems, is too compelling a price. And that is why these services persist, and so do the criminals.