Rental deposit scam: what it is and how the fraud runs

By Advocate Panchanand Shaw, Bar Council of West Bengal · Published 2 Nov 2026 · Online fraud

The rental deposit scam is a property fraud in which a fake landlord or agent advertises a flat, collects a token or security deposit before a viewing, and then disappears. In India, the conduct can be prosecuted as cheating by personation using a computer resource under Section 66D of the IT Act, 2000 and as cheating under Section 318 of the BNS, 2023. The civil remedy is a suit for recovery of the deposit.

What makes this scam effective is that it borrows the language of a normal rental transaction. A genuine landlord also asks for a token. The difference is that the fraudster refuses a viewing, insists on payment through a link or QR code, and creates urgency with a story about other applicants. By the time the victim arrives at the address, the phone is switched off and the listing is gone.

What the law says

Section 66D of the IT Act, 2000 applies where a person cheats by personation using a computer resource or communication device. The fake listing, the fake profile, and the payment link are the computer resources. Section 66C applies where the fraudster uses a forged identity document or impersonates a real owner. Section 66 applies where there is unauthorised access to a computer resource, though that is less common in a pure deposit scam.

Under the BNS 2023, Section 318 covers cheating, and Section 318(4) covers cheating that induces the victim to deliver property. The deposit is the property. Section 316, criminal breach of trust, can apply where the fraudster was entrusted with the deposit and dishonestly misappropriated it. Section 336, forgery, applies to fake ownership documents, forged no-objection certificates, and fabricated rent agreements. Section 351, criminal intimidation, may apply if the fraudster threatens the victim after the demand for a refund.

Section 173 BNSS requires the police to register an FIR on information disclosing a cognizable offence. Section 175(3) BNSS allows a magistrate to order an investigation if the police refuse. Section 480 BNSS provides for victim compensation. Section 63 BSA governs the proof of electronic records, which matters because the listing, the chat, and the payment link are all electronic evidence.

How the fraud actually runs

The scam has a recognisable sequence. Understanding the sequence helps a victim identify which facts to put in the complaint and which facts the police will treat as criminal rather than civil.

Stage one: the listing

The fraudster posts a property at a rent that is slightly below the market rate. The photographs are usually copied from a genuine listing or a broker's old inventory. The listing may show a real building, which makes the victim trust the address. The contact number is often a temporary number or a number registered in another name.

Stage two: the urgency

When the victim calls, the fraudster claims to be out of town, usually for a posting, a family emergency, or a business trip. He says several other people are interested and asks for a token to hold the flat. He may send a copy of an identity card or a property document to build confidence. Those documents are often forged or belong to someone else.

Stage three: the payment link

The victim is asked to pay through a UPI link, a QR code, or a bank transfer to an account in the name of a person the victim has never met. The fraudster may send a fake receipt or a fake confirmation message. If the victim asks to visit, the fraudster gives an address but does not appear, and then stops responding.

Stage four: the disappearance

After the payment, the phone is switched off or the number is changed. The listing is deleted. If the victim visits the address, the real owner or tenant has no knowledge of the transaction. The bank account is usually a mule account opened in someone else's name, which makes tracing slower.

Stage, conduct and red flag

What decides whether it is treated as criminal

The first factor is impersonation. If the fraudster claimed to be the owner or an authorised agent and used a forged document, the case moves from a civil deposit dispute to Section 66D IT Act and Section 318 BNS. If the person was a real agent who simply failed to return a deposit, the police may treat it as a civil matter, even though a criminal case for breach of trust under Section 316 BNS may still be possible.

The second factor is the payment route. A payment to a personal UPI handle that does not match the claimed owner is a strong indicator of fraud. A payment to a company account with a written agreement is more likely to be treated as a commercial dispute. The bank statement and the chat are what show the mismatch.

The third factor is the number of victims. A single complaint can be dismissed as a misunderstanding. A pattern of complaints against the same number, the same listing, or the same account is much harder to explain away. If you know of other victims, say so in the complaint and give the details.

The fourth factor is the speed of reporting. A complaint filed within days, while the listing is still live and the account is still active, gives the police something to act on. A complaint filed months later, after the listing and the account are gone, is harder to investigate.

Civil or criminal: why the label matters

The label matters because it decides which forum hears the case and what remedies are available. A civil suit can order the return of the deposit and award damages, but it cannot freeze the fraudster's bank account or send him to prison. A criminal complaint can lead to arrest, prosecution and victim compensation, but it does not automatically return the money. The two routes are not alternatives; they are parallel tracks with different timetables.

Police officers often treat deposit disputes as civil because the transaction began as a rental negotiation. That classification is not always wrong. If the landlord was real and simply refused to refund, the dispute may be civil. The criminal element appears when the listing was fake, the identity document was forged, or the payment was routed to an account that does not belong to the claimed owner. Those facts turn a commercial disagreement into Section 66D IT Act and Section 318 BNS.

The victim controls which track is available by the way the complaint is drafted. A complaint that says only that the deposit was not returned invites a civil classification. A complaint that sets out the fake listing, the forged document and the mismatched account name gives the police the ingredients of a criminal offence. The same facts can support both a criminal complaint and a civil suit, and neither prevents the other.

What a victim can do before paying

Prevention is cheaper than recovery. Before paying a token, ask for a video call with the owner and a view of the property. Ask for the owner's identity document and compare the name with the name on the bank account. Ask for a written receipt that states the amount, the purpose and the refund condition. If the landlord refuses any of these, the risk is high.

Check the listing photographs with a reverse image search. Fake listings often reuse photographs from genuine listings or from a broker's old inventory. Ask the housing society or the local broker whether the flat is actually available. A genuine owner will not object to a short delay while you verify. A fraudster will create urgency precisely to prevent verification.

Pay by a method that leaves a record. A bank transfer or a UPI payment to a verified account is traceable. Cash is not. If you must pay a token, pay the smallest possible amount and get a written receipt. Do not pay the full deposit before the agreement is signed and the keys are handed over. A fraudster will usually ask for the full amount before the viewing; that demand is the warning sign.

What the listing tells an investigator

A fake listing leaves a trail even after it is deleted. The listing ID, the account that posted it, the phone number in the listing, the photographs, and the payment link are all separate threads. The investigating officer can request the platform to preserve the listing data, the telecom provider to identify the number, and the bank to identify the account holder. Each request takes time, and each one depends on the complaint containing the right identifiers.

This is why the victim should save the listing URL and the profile name before reporting the fraud. A screenshot without the URL is harder to trace. The listing ID allows the platform to locate the account even after the listing is removed. The phone number allows the telecom provider to identify the subscriber. The payment link allows the bank to trace the beneficiary. A complaint that provides all four gives the investigator a starting point; a complaint that provides only a name gives almost nothing.

The photographs are also useful. Fake listings often reuse images from other listings, and a reverse image search can show where the photographs came from. That does not identify the fraudster by itself, but it can connect multiple complaints to the same set of images. A pattern of listings using the same photographs is evidence of a organised operation rather than a one-off dispute.

Common mistakes

• Paying a token before seeing the flat or speaking to the owner on a video call.
• Paying to a personal UPI handle when the claimed owner's name is different.
• Not saving the listing URL and the photographs before the listing is deleted.
• Treating the loss as a pure civil matter and not filing a cybercrime complaint.
• Confronting the fraudster and warning him, which gives him time to close the account.
• Not checking whether the property document is genuine with the local sub-registrar or the housing society.
• Assuming the platform will refund the money. The platform can remove the listing, but it does not hold the deposit.

When to involve a lawyer

A first-time victim can file the 1930 complaint and the police complaint without a lawyer. A lawyer is useful when the police classify the case as civil, when the amount is large, when the fraudster is identified and you want to pursue attachment or compensation, or when you are a genuine landlord accused of a deposit dispute. For the civil side, see civil litigation; for the criminal complaint and the forum, see cyber crime lawyer in Kolkata.

Frequently asked questions

Information for general guidance only and not legal advice. Provisions cited follow the Information Technology Act 2000, the Bharatiya Nyaya Sanhita 2023 and the Bharatiya Nagarik Suraksha Sanhita 2023.

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