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A friend and I want to book a house for Labor Day weekend and we found a place on Craigslist that looks pretty nice. I'm pretty well-traveled myself, but neither of us have rented out a house before. Before you all suggest sites like Airbnb or HomeAway, I've been to them and others. Craigslist is just another outlet, out of the many, I've looked at.

My friend emailed the owner who is asking $200/night and a $700 security deposit. I then asked him to see how payment is to be made. Obviously, paying cash is a big no-no, especially with a refundable security deposit. I'm also wary about personal checks, wire transfers, etc.

Anyway, the owner requested a bank deposit for payment and I'm not so sure about that, it sounds kind of fishy to me.

At the very minimum I'd like to use PayPal or a credit card. Obviously Airbnb, Roomorama, or HomeAway are the better alternatives, but I'm assuming that's not an option.

So I guess what I'm asking is:

A) does this sound like a scam and if not

B) what other ways might I suggest to the owner that I pay such that I can guarantee both his/her and my security?

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    I think your instincts are correct; using PayPal, e.g. would give you the benefit of being able to trace the account holder, should there be a problem. If you don't already have it, you might ask for identifying information, such as address and check property records for ownership.
    – Giorgio
    Aug 27, 2016 at 22:25
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    Are the house and the bank account in the US?
    – phoog
    Aug 28, 2016 at 0:57
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    @phoog the house is in the US. I know nothing about the bank account yet tho
    – audiFanatic
    Aug 28, 2016 at 20:32
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    I was asking because while bank transfers are indeed unusual in the US, they are quite common in Europe and perhaps other parts of the world. If the landlord is European, for example, then the request for a bank transfer is less of a red flag and more likely to be an innocent but perhaps inexperienced advertiser.
    – phoog
    Aug 28, 2016 at 22:29
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    @phoog I've definitely rented holiday property in both the UK and Europe with bank transfers - it's not unusual for person-to-person business like this. There's certainly a risk involved as there is in any such transaction, but asking for a bank transfer is not inherently a red flag. That said, I don't think we paid a security deposit - that would make me a bit more cautious.
    – Andrew is gone
    Aug 28, 2016 at 22:54

3 Answers 3

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Answering Question B, to transact safely, use a platform with an escrow system.

A reversible payment (credit card, PayPal), especially from someone in another country, brings the merchant a nontrivial fraud risk. A non-reversible payment (Western Union, MoneyGram) exposes the consumer to a parallel risk.

This is why you hear time and time again to not conduct long-distance transactions (such as sight-unseen rental) over Craigslist. By far the most common way to get around this is using an escrow agent, a third party (like Amazon or Airbnb) who holds the consumer's payment and disburses payment to the merchant, usually reducing the risk of fraud to near zero. Barring this, I don't think there's an easy solution.

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It sounds fishy to me too. Not as fishy as Western Union or MoneyGram, because I could just guarantee those are scams. For a transaction done on a site that doesn't offer assurances of their own (so this wouldn't apply to AirBnB) I don't think I would do anything other than a credit card, which I could reverse-charge for fraud.

Hard as it is to believe, these scammers often use the same alias and the same address multiple times. Google to see if there are complaints at scam sites. You can also use 411.org or similar to see if the name on the bank account matches the person living at the address—not surefire, but a help.

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PayPal always. Also do your research. Try and speak with the advertiser on the phone, check the address of the property on Google street view and search details of the property online (search the property description, the advertiser's contact details, FB profile, property photos in Google Images). Just don't pay by bank transfer, or any way the payment cannot be traced. And honestly: Craigslist is a hub for scams. Not all of course, but your best bet is paying for a property on TA, HA, Airbnb etc using PayPal through their online payment platform, or if the advertiser takes direct payment, check their longevity and reviews on the site. Don't be tempted by too good to be true prices either, because they probably are just that.

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