Roomster was sued on Tuesday by federal officials and six states, including California, which accused the roommate-matching service of using fake listings and reviews.
The misleading posts, the Federal Trade Commission and state authorities argue, led Roomster – an app to link those seeking to share homes and apartments – to benefit, by receiving more than $27 million from people often struggling to find affordable places to live.
According to a complaint filed in Manhattan federal court, Roomster and its co-founders have since 2016 “inundated the internet with tens of thousands of fake positive reviews to bolster their false claims that properties listed on their Roomster platform are real, available and verified.”
The suit alleges that those harmed were typically lower-income renters and students, with many lured into paying even more money to fraudsters who flooded New York-based Roomster’s platform with their own fake listings.
“Millions of hardworking Californians are struggling to find housing within their budgets. When people see affordable rooms for rent on highly rated apps like Roomster, they trust that these ‘verified’ listings are what they say they are,” said the state’s Attorney General Rob Bonta. “Unfortunately, Roomster hasn’t been honest about the source of its popularity or its commitment to preventing fraud on its app.”
Roomster, in a statement, said the accusations have no merit and “represent another example of the FTC’s overreach.”
Tuesday’s lawsuit...
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