Finding a roommate on the internet has always held an inherent level of risk. But reliably finding a roommate on the internet may have just become less deceptive, thanks to a recent lawsuit settlement by the Federal Trade Commission and the attorneys general of six different states, including Colorado.

In August of 2022, the FTC and six states filed a lawsuit against rental listing platform Roomster Corp., and its owners John Shriber and Roman Zaks, for allegedly duping consumers seeking affordable housing by paying for fake reviews and then charging for access to phony listings.

According to Colorado Attorney General Phil Weiser’s office, under the settlement agreement, Roomster will be required to pay $1.6 million in restitution for its wrongful acts. If the company is found to have misrepresented its finances during the course of the litigation, the company will be liable for an increased judgment of $47 million.

Roomster is a roommate finder and roommate search service and claims to be “the world’s largest online social network for roommates with 4 million active listings,” according to the company. Roomster is a paid subscription service that competes with free-to-use sites such as Craigslist.

“Roomster polluted the online marketplace with fake reviews and phony listings, making it even harder for people to find affordable rental housing,” Samuel Levine, director of the FTC’s Bureau of Consumer Protection said in a recent press release. “Along with our state partners, we aim to hold Roomster and its top executives accountable and return money to hardworking renters.”

The consent order prohibits Roomster and its executives from further purchasing and posting fake reviews to attract customers.

“It’s hard enough to find somewhere to live in Colorado these days without having to navigate through fake app reviews and phony roommate listings,” Weiser said in a statement. “Companies that try to mislead or trick consumers through deceptive practices like these will be held accountable under the law.”

Additionally, the order requires Roomster to authenticate and verify its listings and monitor its affiliate marketers.  This involves: routinely reviewing their marketing materials without notice; investigating consumer complaints about marketing affiliates; providing refunds to consumers who were impacted by affiliate conduct that is in violation of the order, and halting payments and terminating affiliates who pose as consumers or otherwise misrepresent their status.

Attorneys general of California, Florida, Illinois, Maryland and New York joined Weiser and the FTC in the lawsuit.

Coloradans who believe they have been targeted by deceptive marketing of any kind should file a complaint at stopfraudcolorado.gov.