FTC Warns on Widespread Section 8 Fraud

In the United States, disadvantaged families can apply for what’s known as “Section 8” housing assistance—access to apartments and other dwellings that are kept at an affordable rental rate specifically for low-income workers. The Federal Trade Commission is now warning that scammers are looking to take advantage of these struggling citizens.

According to Lisa Lake, a consumer education specialist at the FTC, scammers have begun creating websites that look like registration sites for Section 8 waiting list lotteries. The sites look very real: The names may say “Section 8,” and they might show an Equal Housing Opportunity logo. But they’re only geared to ask for fees and personal information, like Social Security numbers, which can be sold on the black market or used for ID theft. And of course, they don’t actually result in signing the victim up for the waiting list.

“People have lost money and personal information to scammers—but they’ve also lost the chance to be in the actual lottery,” Lake said in an advisory. “Most people don’t realize they’ve been scammed until after the waiting list is closed.”

And it’s becoming widespread: A search online for ‘Section 8 voucher waiting list’ returns top search results that are actually bogus sites.

“If you pay a fee or give your personal information, the scammers will take it,” Lake said. “In fact, there is no fee to register for a Section 8 waiting list.”

Here’s the real way things work: The US Department of Housing and Urban Development (HUD)’s Section 8 program gives funding to local government housing authorities. The local authorities issue housing choice vouchers to help people find housing in privately-owned rental units.

To get on the waiting list for a voucher, consumers should call or email their local housing authority, and ask how to sign up for the Section 8 waiting list lottery. This is a free process.

In a twist, some fake sites list Section 8 properties that supposedly are available. They promise you can rent one, if you pay the first month’s rent via wire transfer or a prepaid card.

“The properties might exist, but the ads are fakes placed by scammers,” Lake said. “If you pay, you just lose your money.”

The bottom line is that Section 8 applications and waiting lists involve no exchange of money. Housing authorities do not charge fees, and they won’t reach out by phone or email to suggest that someone join a waiting list. A housing authority also will never ask someone to wire money or pay with a prepaid card: These are sure signs of a scam.

What’s Hot on Infosecurity Magazine?