The FTC Cracks Down on Roomster: A Cautionary Tale of Fake Reviews and Phony Listings
The proposed fine of $36.2 million, with $10.9 million in civil penalties. But Roomster only has to pay $1.6 million because they're "financially unable" to.
Disclaimer: This article is as informational as it is snarky. For actual legal advice, consult someone who passed the bar exam, not the in-flight snack bar.
Rather fail with honor than succeed by fraud.
Hey there, Justice Moms and Dads! If you're in the mood for some delicious schadenfreude, you're in for a treat. Roomster Corp., the company that promised you a dream home but delivered a nightmare, just got a reality check from the FTC. And let me tell you, it's ' good.
The Illusion of Authenticity
So, Roomster Corp. and its dynamic duo of owners, John Shriber and Roman Zaks, are now permanently banned from buying or incentivizing consumer reviews. Why? Because they were caught red-handed buying fake reviews to lure you into their web of lies. They promised "verified, authentic, and available" listings. Spoiler alert: They were as authentic as a three-dollar bill.
But that's not all, folks. The FTC, backed by a Justice League of AG’s from six states, also accused Roomster of using fake listings on Craigslist to funnel traffic to their scammy platform. You pay the fee, and boom! The listing vanishes like a politician's promise.
The Hefty Price Tag
Samuel Levine, the Director of the FTC’s Bureau of Consumer Protection, put it bluntly: “Baiting renters with fake reviews and bogus listings is basically screwing over people looking for an affordable place to live.”
The proposed fine? A jaw-dropping $36.2 million, with an extra sprinkle of $10.9 million in civil penalties. But get this: Roomster only has to pay $1.6 million because they're "financially unable" to pay the full amount. Cue the world's smallest violin.
According to our friends at the FTC, Roomster flooded the internet with fake four- and five-star reviews, mostly bought from a guy named Jonathan Martinez, who's already settled with the FTC. Consumers who fell for the scam found out that Roomster's listings were faker than a Hollywood smile.
The order also puts Roomster on a short leash. They have to monitor their affiliate marketers, investigate complaints, and—get this—provide refunds to consumers who got duped. It's like putting a band-aid on a bullet wound, but hey, it's something.
If you're a business, don't be like Roomster. Deception might give you a quick buck, but it'll cost you in the long run. And for all of you out there, always keep your BS detectors on high alert. You're not just protecting yourself; you're setting an example for your families on how to navigate this crazy world.
Roomster isn't a lone wolf; it's part of a pack of deceptive practices that are ruining the online marketplace. The FTC is stepping up, but it's also on us to call out the BS when we see it.!
Disclaimer: Always consult with a legal expert for matters concerning lawsuits and settlements.
