The Federal Trade Commission (FTC) and several states have obtained a settlement and proposed court order that would ban Roomster and its owners from using deceptive reviews and fraudulent listings to lure customers to its platform, the FTC announced in a press release.
"Today’s settlement bans Roomster and its owners from buying or incentivizing reviews, cuts off their ability to blame phony listings on their affiliate marketers, and requires them to pay monetary judgments to our six state partners," said Samuel Levine, director of the FTC’s Bureau of Consumer Protection. “Baiting renters with fake reviews and bogus listings harms those trying to find an affordable place to live and cheats honest competitors, undermining the online marketplace.”
Roomster Corp. and its owners, John Shriber and Roman Zaks, will face a permanent prohibition on purchasing or incentivizing consumer reviews under the settlement. The case arises from allegations that Roomster and its proprietors procured fabricated reviews to attract consumers into paying for access to housing listings that were purportedly verified and authentic but often proved to be fraudulent. Initially reported in August 2022, the FTC complaint, with the collaboration of attorneys general from various states, also accused Roomster and its owners of employing fictitious listings on platforms like Craigslist to redirect consumers to Roomster's site. This strategy led individuals to pay fees only to find out that the listings were nonexistent, the FTC press release said.
Roomster flooded the internet with a multitude of fake reviews, the FTC said. These were largely procured from Jonathan Martinez, operating as AppWinn, who settled earlier with the FTC. Roomster's practices included the distribution of numerous four- and five-star fake reviews, the FTC said. Consumers who subscribed to Roomster's service expressed dissatisfaction when they discovered that many of the housing listings provided by the company were fraudulent, and Roomster failed to uphold its promise of authenticating the legitimacy of the listings, the FTC said in the release.
The settlement's proposed order will permanently prevent Roomster, Shriber, and Zaks from offering incentives or compensation for consumer reviews. It will also bar them from utilizing reviews that may be influenced by their relationship with the reviewer. The proposed order also includes a monetary judgment of $36.2 million and civil penalties totaling $10.9 million, payable to the states involved. These amounts will be partially suspended, contingent on Roomster and its owners paying $1.6 million to the six states, the release said. If the defendants breach the order's terms or misrepresent their financial standing, the full amounts will become immediately due.
