Three people have been arrested under suspicion of brokering the sale of investment-type apartments to buyers without having the necessary real estate licenses, and through dubious sales tactics.

According to the police, the three suspects are accused of selling relatively overpriced studio apartments to three women that were approached via dating websites. The apartments were sold for approximately 27 million Yen each, which was estimated to be approximately 10 million Yen above their true market price.

After the properties were sold, the suspects promptly ceased contact with the women they were dating. The suspects collected as much as 7.1 million Yen in brokerage fees despite not being licensed.

Women were targeted based on their dating profiles, with those in their 30s and 40s and annual salaries over 10 million being preferred because they were more likely to be approved for finance.

Real estate investment scams targeting users of dating websites has surged in recent years. The average age of a victim to one of these scams is 35, and women are twice as likely to to targeted. After several dates, the scammer will suggest that their date consider buying an investment property to supplement their retirement income. Properties might come with rental guarantees so that the buyer doesn’t have to worry about the risk of vacancy.

In many of the reported cases, the victims were found to have purchased apartments at prices well above their market value, sometimes as much as 75% above the market price. There are suspicions that both apartment sellers and financial institutions involved in the transactions may also be complicit with the practice.

In March 2016, the Tokyo District court ruled in favour of one of the victims of a dating scam. The property sales company and salesperson behind the dating scam were ordered to pay the victim 13.55 million Yen in compensation.

How the scam works:

A typical, 25 sqm studio apartment might be sold to a victim for 25 million Yen. The victim will be assisted in obtaining a 35-year, 90% loan of 22 million Yen. The entire process, from collecting documents to submitting loan applications is done by the victim’s ‘partner’ met through the dating service, who happens to be secretly working for the seller.

The seller may be a real estate company that has bought up a block of apartments to sell of individually. Units that might have a true market value of 18 million Yen are sold to the unsuspecting victims for 25 million Yen each, with the 7 million Yen mark-up going to the salesperson’s company as commission.

Sources:
AERA, May 23, 2016.
The Asahi Shimbun, May 19, 2016.
The Nikkei Shimbun, May 20, 2016.
TBS, May 19, 2016.

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