Information and Alerts

Government Actions

FTC, California, Colorsado, Florida, Illinois, Massachusetts, New York vs Roomster Corp, John Shriber, Roamn Zaks and Jonathan Martinez. Case number 1:22-cv-07389 SD NY.

UPDATE As of September 5, 2023

A Stipulated Order for Permanent Injunction, Monetary Judgment, and Other Relief against Roomster Corp., John Shriber and Roman Zaks has been issued to settle a claim of a violations of Section 5 of the FTC Act, 15 USC Section 45. 

The order mandates that Roomster is permanently enjoined and restrained from:

Paying or providing incentives for customer reviews

Publishing any review where the reviewer has a relationship with the company or settling Defendant that might affect the credibility of the review

Posting any review that is not truthful or from an actual user of the product

Misrepresenting that a listing is for a living arrangement is verified, authentic or available

Failing to advise any marketing affiliate of the existence of this Order

Roomster is ordered to pay a judgment in the amount of $36,260,899.84 which will be suspended upon the payment of $1,600,000.00 within 7 days of this Order.  In addition, the following civil penalties were ordered:

A civil penalty in the amount of $2,084,100.00 to the State of California.

A civil penalty in the amount of $565,850 to the State of Colorado.

A civil penalty in the amount of $2,084,100.00 to the State of Florida.

A civil penalty in the amount of $2,084,100.00 to the State of Illinois.

These penalties will be suspended upon payment of the $1,600,00.00 ordered above.

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As of August 28, 2023

FTC, State Partners Secure Proposed Order Banning Roomster and Owners from Using Deceptive Reviews

Roomster used fake reviews, phony listings to lure consumers to its platform, according to FTC, states

The Federal Trade Commission will permanently ban Roomster Corp. and its owners, John Shriber and Roman Zaks, from buying or incentivizing consumer reviews as part of a settlement over charges that they bought fake reviews to entice consumers to pay for access to living arrangement listings that they claimed were verified, authentic, and available but often turned out to be fake.

The proposed order will permanently ban Roomster, Shriber, and Zaks from paying or otherwise providing incentives for consumer reviews, and from using or disseminating reviews where they have a relationship with the reviewer that might affect the review’s weight or credibility.

In addition, the proposed order includes a monetary judgment of $36.2 million and civil penalties totaling $10.9 million payable to the states. These amounts will be suspended after Roomster and its owners pay $1.6 million to the six states based upon the defendants’ inability to pay the full amount. If Roomster and its owners are found to have misrepresented their financial status or to have violated the terms of the order, the full amounts would immediately become due.

The order also prohibits them from misrepresenting: that any review is truthful or represents a real user; that any rental listing is verified, authentic, or available; or any other material fact. It also requires Roomster to take steps to monitor its affiliate marketers. This includes routinely reviewing their marketing materials without notice; investigating consumer complaints about affiliates; providing refunds to consumers who were impacted by affiliate conduct that violated the order; and halting payments and terminating affiliates who pose as consumers or misrepresent their status in other ways.

LINK: https://www.ftc.gov/news-events/news/press-releases/2023/08/ftc-state-partners-secure-proposed-order-banning-roomster-owners-using-deceptive-reviews

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As of August 30, 2022

FTC, States Sue Rental Listing Platform Roomster and its Owners for Duping Prospective Renters with Fake Reviews and Phony Listings

Agency, States Also File Proposed Order Requiring Fake Review Seller to Pay $100,000 and Cooperate in Case Against Roomster

The Federal Trade Commission 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. The complaint alleges that Roomster and its owners have taken tens of millions of dollars from largely low-income and student prospective renters who need reliable housing the most and can least afford to lose money. Separately, the FTC and the states filed a proposed order against Jonathan Martinez—who allegedly sold Roomster tens of thousands of fake reviews—requiring him to pay $100,000 and cooperate in the FTC’s case against Roomster.

Roomster operates a website and mobile apps where users can pay a fee to access living arrangement listings, including rental properties, room rentals, sublets, and roommate requests. The company claims to offer “authentic” and “verified” listings. However, in a complaint filed in federal court along with the attorneys general of New York, California, Colorado, Florida, Illinois, and Massachusetts, the FTC and its state partners allege that Roomster, along with Shriber and Zaks, used fake reviews and other misrepresentations to lure consumers to its platform and pay for access to listings that often turned out to be fake. The complaint also alleges that Martinez, doing business as AppWinn, deceptively promoted the Roomster platform by providing tens of thousands of fake four- and five-star reviews.

The complaint alleges that the deceptive tactics of Roomster, Shriber, Zaks, and Martinez violated the FTC Act and state laws. Many consumers rely on reviews when deciding whether to purchase a product or service. Fake reviews distort the marketplace and make it difficult for consumers to make informed decisions. The deceptive tactics alleged in the complaint include:

 -Posting fake positive reviews: Roomster’s operators, with the help of Martinez, have saturated the internet with tens of thousands of four- and five-star fake reviews, which dilute negative reviews posted by real consumers, some of whom warn that many of Roomster’s listings are fake. The complaint alleges that Roomster’s operators told Martinez to take steps to make the reviews look real. For example, Shriber urged Martinez to spread out the reviews so they were “constant and random.”

-Claiming to offer verified and authentic listings: Roomster misrepresents that it offers millions of “verified listings” when in fact the company does not verify listings or ensure they are legitimate and authentic. For example, the FTC’s investigation found that the company immediately accepted and published a fake listing for a fictional apartment at the same address as a U.S. Post Office commercial facility.

-Using phony listings to attract paid users: Roomster has advertised on internet sites like Craigslist using fake listings that drive consumers to Roomster’s platform. Once on the site, consumers paid fees to obtain information necessary to secure the listings, only to discover that the listings didn’t even exist. In addition, after signing up for Roomster’s service, consumers complain they are often bombarded by fraudsters with more fake listings.

According to the complaint, Roomster and its owners were assisted by Martinez in their efforts to deceive consumers by posting fake reviews to the app stores. In addition to cooperating with the FTC in its ongoing case against Roomster, Martinez, as part of the proposed stipulated final order with the FTC and the states, is also required to:

-Notify the app stores: He must notify the Apple and Google app stores that Roomster paid him for posting reviews on each platform and must identify the fake reviews and approximate times they were posted;

-Stop selling reviews: Martinez will be permanently banned from selling or misrepresenting consumer reviews or endorsements;

-Pay $100,000: Martinez must pay a total of $100,000 to the FTC’s six state partners: New York, California, Colorado, Florida, Illinois, and Massachusetts.

NOTE: The Commission files a complaint when it has “reason to believe” that the named defendants are violating or are about to violate the law and it appears to the Commission that a proceeding is in the public interest. The case against Roomster and its owners will be decided by the court. Stipulated final orders have the force of law when approved and signed by the District Court judge.

LINK: https://www.ftc.gov/news-events/news/press-releases/2022/08/ftc-states-sue-rental-listing-platform-roomster-its-owners-duping-prospective-renters-fake-reviews