Apartment search platform Roomster fined $1.6M for duping renters

August 28, 2023 Rob Abruzzese

Attorney General Letitia James, in a dedicated effort to ensure transparency and integrity in charitable giving, releases the 'Pennies for Charity' report.
Photo: Seth Wenig/AP

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Attorney General Letitia James and the Federal Trade Commission (FTC) have secured $1.6 million from online apartment search platform Roomster and its owners, John Shriber and Roman Zaks, for defrauding millions of renters nationwide by posting unverified apartment listings and fake reviews.

The consent order obtained Monday also prohibits Roomster and its executives from buying and posting fake reviews to attract customers.

Roomster, based in Manhattan, posted non-existent apartment listings and scammed consumers with fake positive reviews that it purchased and posted online. Attorney General James and the FTC led a coalition of six attorneys general to halt Roomster’s deceptive practices and secure restitution for affected individuals nationwide.

“Roomster deceived and misled hundreds of students, young adults and low-income renters for its own benefit.” James said. She thanked the FTC for their partnership in protecting renters nationwide and noted that the consent order prevents Roomster from posting fake reviews on unverified listings and harming renters trying to find a home in New York.

In August 2022, Attorney General James and the FTC filed a lawsuit against Roomster for misleading consumers by posting fake reviews purchased through marketers, posting non-existent apartment listings and failing to verify apartments listed on their website. Undercover investigators found that Roomster did not verify listings posted by users or ensure their authenticity. Roomster’s executives, John Shriber and Roman Zaks, bought over 20,000 fake reviews from Jonathan Martinez, who operated as AppWinn, to increase traffic to their platform.

The lawsuit alleged that Roomster’s executives devised a scheme to post fake reviews to appear real and increase their chances of being published on app stores. They called this a “drip campaign,” instructing Martinez to post a random amount of reviews in several countries, specifying how many reviews should go to each country.

The fake positive reviews bought by Roomster and published online included statements like “Roomster is better than others. Very easy to use. Tons of listings. No scammers, all users are real. Easy to communicate with owners. In a single word FANTASTIC!” These fake reviews diluted 1-star reviews from real users, who warned against using the site due to scams and fake profiles.

The consent order includes a monetary judgment of $36.2 million and civil penalties totaling $10.9 million payable to the states, which will be suspended after Roomster and its owners pay $1.6 million to the six states based on their inability to pay the full amount. If Roomster and its owners are found to have misrepresented their financial status or violated the order’s terms, the full amounts would immediately become due.

The order also requires Roomster to verify and authenticate its listings and monitor its affiliate marketers. This includes reviewing marketing materials without notice, investigating consumer complaints about affiliates, providing refunds to consumers 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.

Attorneys general of California, Colorado, Florida, Illinois and Maryland joined Attorney General James and the FTC in the lawsuit.