Misrepresentation and fraud

On Behalf of | Sep 29, 2023 | Business Law |

Some California residents may have already been adversely affected by a situation occurring through an online apartment search company known as Roomster. The company is based in another state but people throughout the country, especially college students or those seeking employment in other states, use the online search tool to help them locate apartments available for rent. A lawsuit was recently filed against Roomster for misrepresentation and fraud. 

The New York Attorney General and Federal Trade Commission (FTC) were the plaintiffs in the lawsuit. They allege that Roomster defrauded people who used its online search tool by posting fake reviews and not vetting or verifying apartments listed for rent on the site. Investigators reportedly made a “test” listing using a U.S. Post Office address. They claim that Roomster never contacted them to verify the information. 

Roomster CEO and CTO accused of purchasing fake reviews 

Roomster’s chief executive officer and chief technology officer was accused of purchasing more than 20,000 fraudulent reviews to add credibility to the website’s listings. The reviews were mostly written with four or five stars and were allegedly intended to boost traffic to the site.  

Roomster is reportedly unable to pay the full judgment that was part of a consent order. Because of this, the court ruled that the full judgment will be suspended once the defendant pays $1.6 million to six states, including California, as compensation for damages regarding misrepresentation and fraud. The company must also verify all its listings and monitor its affiliate marketers. Any California business facing issues regarding fraud would be wise to seek legal support from an attorney experienced in this type of litigation. 


RSS Feed