By Jonathan Stempel
NEW YORK (Reuters) – Roomster was sued on Tuesday by the U.S. Federal Trade Commission (FTC) and six states, which accused the roommate matching service of using fake listings and reviews to take more than $27 million from people often struggling to find 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 complaint said those harmed were typically students, lower-income individuals, and people desperate for safe, low-cost housing, and that many were lured into paying more money to fraudsters who flooded Roomster with their own fake listings.
California, Colorado, Florida, Illinois, Massachusetts and New York joined the lawsuit against Roomster, co-founders John Shriber and Roman Zaks, and Jonathan Martinez, who ran the business AppWinn.
The complaint said Martinez sold more than 20,000 fake reviews to New York-based Roomster, with Shriber instructing him to produce “lots of 5 star IOS app reviews” and saying he “would like to be #1” for people seeking roommates.
Martinez reached a $100,000 settlement and agreed to cooperate with the regulators, court papers show.
A lawyer for Roomster, Shriber and Zaks did not immediately respond to requests for comment. Martinez’s lawyer did not immediately respond to a similar request. The FTC had no immediate additional comment.
Tuesday’s lawsuit seeks civil penalties, and an injunction against violations of federal and state unfair trade laws.
(Reporting by Jonathan Stempel in New York; Editing by Bill Berkrot)
