Roomster sued by FTC and six states for tricking prospective renters with fake reviews and phony listings

Roomster and its owners are being sued by the Federal Trade Commission and six states alleging that the room and roommate finder platform posted reviews and other information that was false.

The lawsuit announced Tuesday charges that Roomster posted fake positive reviews and made deceptive claims about its listings being real, available, and verified – to convince people to use its platform.

New York, California, Colorado, Florida, Illinois and Massachusetts joined the case against Roomster and co-founders John Shriber and Roman Zaks.

“There is a term for lying and deceiving your customers to grow your business: fraud,” New York Attorney General Letitia James said in a statement. “Roomster used illegal and unacceptable practices to grow its business at the expense of low-income renters and students.”

The FTC and states also announced an action against “AppWinn” operator Jonathan Martinez, who the lawsuit alleges supplied thousands of the fake reviews to Roomster. In addition to cooperating with the FTC in its case against Roomster, Martinez is also required to:

• Notify the app stores: He is to notify the Apple and Google app stores that Roomster paid him for posting reviews on each platform and identify the fake reviews and the times they were posted.
• Stop selling reviews: Martinez will be permanently banned from selling or misrepresenting consumer reviews or endorsements.
• Pay $100,000: Martinez will pay $100,000 to the FTC’s six state partners.

When a company has a number of false, glowing reviews online, they can dilute real ones that describe customers’ actual experiences, the FTC said. This can make it difficult for people to make informed decisions about which products or services to buy and use.

Roomster’s customers – mostly students, people with lower incomes, and those living in areas with little affordable housing – have ended up paying millions of dollars for information on rentals that often didn’t exist.

If you’re looking at online reviews for housing or services or goods, the FTC recommends:

• Think about the source of the reviews you’re reading. What do you know about the reviewers that makes them trustworthy?
• Compare reviews from a variety of well-known sources, not just one site. Start with websites recognized for having credible and impartial reviews.
• Search online for the company name along with terms such as “complaint,” “scam,” or “fraud” to see what issues others might have had.

If a company makes false or misleading claims, report it to the FTC at ReportFraud.ftc.gov.