Attorney General James and FTC Secure $1.6 Million from Online Apartment Finder for Defrauding Renters

NEW YORK – New York Attorney General Letitia James and the Federal Trade Commission (FTC) today secured $1.6 million from Roomster, an online apartment search platform, and its owners, John Shriber and Roman Zaks, for defrauding millions of renters nationwide by posting unverified apartment listings and fake reviews. Today’s consent order also prohibits Roomster and its executives from buying and posting fake reviews about their listings to lure customers. Roomster, a Manhattan-based company, failed to verify apartments submitted to its website, posted non-existent apartment listings, and scammed consumers with fake positive reviews that it bought and posted online. Attorney General James and the FTC co-led a coalition of six attorneys general to stop Roomster’s deceptive practices and secure restitution for impacted individuals nationwide.

“Amid a housing crisis, Roomster deceived and misled hundreds of students, young adults, and low-income renters for its own benefit,” said Attorney General James. “Today’s consent order blocks Roomster from posting any more fake reviews on unverified listings and prevents the company from harming renters trying to find a home in New York. Looking for an apartment can be stressful, and the last thing renters need is to be scammed by fake reviews and apartments that might not even exist. I thank the FTC for their partnership to protect renters nationwide.”

In August 2022, Attorney General James and the FTC filed a lawsuit against Roomster for misleading consumers by posting fake reviews that were purchased through marketers, posting non-existent apartment listings, and failing to verify apartments listed on their website. An investigation found that Roomster did not actually verify listings posted on its platform by users or ensure that they were real or authentic. Undercover investigators were easily able to post a listing with a U.S. Postal Office commercial facility address on the platform. The listing provided by the undercover investigators had fake rental specifications and remained on the platform for several months. At no point did Roomster contact the undercover investigators to verify the address, the specifics of the apartment, the legitimacy of the email, or other personal information of the lister.

To lend credibility to its unverified listings, Roomster’s executives saturated the internet with tens of thousands of fake 4- and 5-star reviews. Roomster’s CEO, John Shriber, and Chief Technology Officer, Roman Zaks, bought more than 20,000 fake reviews from Jonathan Martinez, who did business as AppWinn, to increase traffic to their platform. Mr. Martinez used more than 2,500 fake iTunes accounts, as well as fake Gmail accounts, to push out fake reviews on Roomster’s apps. Before Mr. Martinez became aware of this investigation, his website stated, “Buy app reviews & boost your app ranking.”

The lawsuit alleged that Roomster’s executives were deliberate about how to post the fake reviews to appear real and increase the chances of them being published on app stores. They called this scheme a “drip campaign.” Mr. Martinez told Roomster’s executives that fake reviews had to be “dripped” at a “slower pace” in order to “stick.” Similarly, Mr. Zaks told Mr. Martinez to spread out the reviews to be “constant and random” to increase their chances of getting posted on the app stores. On multiple occasions, Roomster’s executives directed Mr. Martinez to post a random amount of reviews in several countries, specifying in their orders how many reviews should go to each country.

Some examples of the fake 5-star reviews that Roomster bought from Mr. Martinez and published include:

Wonderful!
Roomster is better then [sic] others. Very easy to use. Tons of listing. No scammers, all users are real. Easy to communicate with owners. In a single word FANTASTIC!
like!

Roomster is great!
Especially for low-income people who need rented accom[m]odation or those students who need to rent a room because [i]t provides the service with a reasonable price range period.

The sheer volume of positive fake reviews diluted 1-star reviews from real users, such as:

Full of scammers
I highly highly suggest that you do not use this site! Because you will get scammed. This app is loaded with people trying to scam you! Out of every 10 post 8 [sic] are scammers DO NOT USE THIS APP!!

Scam
This app is garbage. I had higher hopes but it completely let me down. Every profile on here seems to be a fake profile and every message I got from people said almost exactly the same thing. Not worth it.

Don’t waste your time
I couldn’t give it zero. It won’t let me view things so I got a 7 day subscription. Reached out to 38 listers. Got response from only 1 legitimate lister. The rest was all scam and 5 days of headache. Steer clear. They don’t vet

Today’s consent order includes a monetary judgment of $36.2 million and civil penalties totaling $10.9 million payable to the states. These amounts will be suspended after Roomster and its owners pay $1.6 million to the six states based upon the defendants’ inability to pay the full amount. 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.

The order also requires Roomster to ensure that its listings are verified and authentic and to monitor its affiliate marketers. This includes routinely reviewing their marketing materials without notice; investigating consumer complaints about affiliates; providing refunds to consumers who were impacted by affiliate conduct that violated the order; and halting payments and terminating affiliates who pose as consumers or misrepresent their status in other ways.

Joining Attorney General James and the FTC in today’s lawsuit are the attorneys general of California, Colorado, Florida, Illinois, and Maryland.

This case was handled by Assistant Attorneys General Christian Reigstad and Melvin Goldberg of the Consumer Frauds Bureau. The Consumer Frauds Bureau is led by Bureau Chief Jane Azia and Deputy Bureau Chief Laura Levine and is a part of the Division for Economic Justice, which is led by Chief Deputy Attorney General Chris D’Angelo and First Deputy Attorney General Jennifer Levy.