Letitia James: Roomster apartment search company agrees to pay $1.6M, halt deceptive practices

A Manhattan-based apartment search company accused of defrauding millions of renters across the nation by posting unverified listings and fake reviews has agreed to pay $1.6 million in restitution and halt deceptive practices, New York Attorney General Letitia James announced Monday. 

Roomster agreed to the consent order one year after James and the Federal Trade Commission, joined by attorneys general from California, Colorado, Florida, Illinois, and Maryland, filed a federal lawsuit against the company in the Southern District of New York in August 2022. 

James said an investigation found that Roomster did not ensure that home postings on its website were authentic. Undercover investigators had no problems posting fake listings, she said, which remained on the platform for several months. Roomster employees never contacted the undercover investigators to verify the address or the specifications of the apartment, or other personal information from the lister. 

“Amid a housing crisis, Roomster deceived and misled hundreds of students, young adults, and low-income renters for its own benefit,” James said in a statement.

Roomster chief executive officer John Shriber and chief technology officer Roman Zaks also purchased more than 20,000 fake reviews from Jonathan Martinez, who did business as AppWinn, to boost traffic to their platform. Martinez uses more than 2,500 fake iTunes accounts, as well as fake Gmail accounts, to push fake reviews on Roomster’s apps. 

Gary Snyder, an Atlanta-based attorney for Roomster, Shirber and Zaks, declined to comment on Monday. Martinez, who is listed as a defendant in the lawsuit, could not be reached for comment. 

“Roomster is great!” said an example given by James' office of the reviews the company purchased from Martinez. “Especially for low-income people who need rented accom[m]odation or those students who need to rent a room because [i]t provides the service with a reasonable price range period.”

The high volume of bogus reviews like that, James said, buried unsatisfactory — but genuine — negative reviews. 

“Full of scammers,” one reviewer wrote. “I highly highly suggest that you do not use this site! Because you will get scammed. This app is loaded with people trying to scam you! Out of every 10 post 8 [sic] are scammers DO NOT USE THIS APP!!”

Said another reviewer: “Scam. This app is garbage. I had higher hopes but it completely let me down. Every profile on here seems to be a fake profile and every message I got from people said almost exactly the same thing. Not worth it.” 

The consent order includes a monetary judgment of $36.2 million and civil penalties totaling $10.9 million, but James said those amounts will be suspended after Roomster and its owners pay $1.6 million to the six states, based on the defendants’ inability to pay the full amount. The company will have to immediately pay the full amount if officials determine that Roomster and its owners misrepresented their financial status or violated the terms of the order.