BEWARE of fraud by erentpayment.com

General Landlording & Rental Properties
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BEWARE of fraud by erentpayment.com

Karen HigginsPro Member
Minneapolis, MN · Member since 2017 · 83 posts · 89 votes

We are currently in the middle of a scam by erentpayment.com.  They have taken money deposited by our tenants and have refused to pay us.  They have been very limiting with information and turned their phones off and are not replying to emails.  Cancel all automated payments if you currently use their system.  We are starting the legal process to take action.  I'm guessing they have taking hundreds of thousands of dollars from people.  Help spread the word so others are not hurt by this.

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Matt Higgins
Property Manager · Blaine · Member since 2015 · 209 posts · 276 votes
8y

My wife found this company on bigger pockets.  She most definitely is in the right, and boarder line obligated to inform the public that a company that used to accept payments from tenants, and disburse the funds to landlords is no longer longer disbursing the funds to landlords.  Furthermore, they have shutoff their phones and customer service department, not updated their customers as to the status of their funds, and refused to name their banking institutions or legal representation that they are using.  

This is most certainly a fraud, and a large one. If not, they should be updating their customer base as to where their money is at, and when they will get it. This rent collection and payment scheme is the perfect Ponzi scheme. They take a clients money and can move it from bank to bank like it's their own money. (Matt, thats apparently what you think happened). Thus, proving the lack of oversight involved in this kind of business/industry. As long as they can grow their customer base the scheme continues. The creator doesn't even have to put himself out there as the frontman of the scheme, and can hide behind an LLC. Interestingly, Rick S is a "pro" member, claims to be the manager or owner, and has 397 post on bigger pockets. I encourage him to comment, or better yet send me my 13,000$. At this point I doubt either will happen.

I hope I'm wrong, but when the company shuts off the phone and fails to deliver on the "updates" they promise.  You have to fear the worse.  This company is still accepting "new" money and the public needs to know.  I don't want to come across as confrontational, but the public needs to be made aware of the problem/fraud.  

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  • Don SpaffordPro Member
    Investor · Idaho Falls, ID · Member since 2016 · 935 posts · 629 votes
    8y

    Interesting thread. I have been using erent since July 2017 and have had absolutely 0 issues. I always got a quick response when I had a question about getting things set up properly, etc. Maybe this only affected accounts set up prior to a specific date? So they were held on a different server so when things switched something went wrong. But it seems to me if it were "fraud" it would be affecting everybody, not just some accounts.

    0Reply
  • Dan Goese
    La Jolla, CA · Member since 2013 · 2 posts · 4 votes
    8y

    To clarify for Don Spafford and others...
    This was NOT:

    • Limited to certain customers up to a certain date
    • Related to what server the customer's file was on

    This affected all customers during a very narrow time frame. So if your tenants didn't submit payment during that window in mid-October 2017 you dodged a bullet. But given the complete lack of updates from eRentPayment and the now-obvious risk of losses, I can't overemphasize the importance of finding a payment service other than eRentPayment. Once your money is missing you won't have a solution (outside of the court system) and you'll kick yourself for not heeding the warnings in this thread. 

    Once upon a time I was also impressed with eRentPayment's prompt service. Now I wish I had never heard of them.

    3Reply
  • Charles Frankenhoff
    Investor · richmond, VA · Member since 2011 · 29 posts · 16 votes
    8y

    Checking in to see if anyone has heard anything.  I lost around 1200, which seems pretty good compared to some of the stories

    0Reply
  • Jennifer Breininger
    Member since 2018 · 2 posts · 0 votes
    8y

    Also lost about $1200 during this debacle. I suspect we won't hear anything else about it either. Their solution of R10 to the bank was completely useless, it put all the responsibility on to the tenant and depending on your tenant, they may or may not have helped you out. Ridiculous.

    0Reply
  • Jay Williams
    Investor · Washington, DC · Member since 2015 · 11 posts · 0 votes
    8y
    Originally posted by @Charles Frankenhoff:

    Checking in to see if anyone has heard anything.  I lost around 1200, which seems pretty good compared to some of the stories

     A group has filed a lawsuit against eRentpayment and they are seeking class action status.

    https://businessden.com/2018/01/25/disappearing-re...

    eRentpayment has acknowledged the lawsuit.

    https://support.erentpayment.com/kb/a166/04-09-201...

    0Reply
  • Jennifer Breininger
    Member since 2018 · 2 posts · 0 votes
    8y

    Any info on how to jump on board with this lawsuit?

    0Reply
  • Shane H.
    Investor · Spokane Valley, WA · Member since 2014 · 175 posts · 94 votes
    7y

    Any updates on this? Are people still without their money?

    0Reply
  • Garrick Oconnell
    Rental Property Investor · Phoenix Tempe Scottsdale, AZ · Member since 2014 · 184 posts · 55 votes
    7y

    I was able to get my $ back working with my tenant jump through hoops with his bank. I was very lucky it was a very helpful tenant Erent did NOTHING to help and if they are still in business they should close there doors. I had 10 properties setup and luckily only 1 property was affected and I cancelled all the other properties as soon as I was aware. (NO THANKS TO ERENT WHO NOTIFIED PEOPLE A WEEK OR MORE AFTER THE ISSUE AND MONEY WAS GONE) 

    I have not heard from from erentpayment since they sent out a few boiler plate emails to everyone maybe a year ago, I recovered my money through cancelling payment through the bank.

    Lesson learned be very careful with online rental payments focus on using companies that control there ACH transfers or are accountable. 

    2Reply
  • Ryan Z.
    Investor · Long Branch, NJ · Member since 2015 · 27 posts · 3 votes
    7y

    Rick / Erentpayment / BP members:  Any updates on this?  I'm still out money..

    I see some info regarding proceedings on the below site, but honestly cannot decipher it..

    https://www.inforuptcy.com/filings/kywbke_327234-3...

    Thanks,

    Ryan

    1Reply
  • John Nachtigall
    Santa Rosa, CA · Member since 2017 · 325 posts · 701 votes
    7y

    @Ryan Z.

    I dont have any skin in the game, but when it happened I joined ePacer (the document control site for the federal bankruptcy courts) to follow along.   I read the filings every once and awhile to see what is happening.   I am not a lawyer so the summary is just my reading of the filings

    - They tried to stop the refunds when the money was being requested by the tenets and being pulled back from the bank.   The rules of ACH apparently provide for 60-90 days to pull money back.   They tried to turn that off but never did before the time ran out.   Seems like ~50% of people managed to pull it back.   If your tenet or their bank did not cooperate you didnt get it back 

    -  It appears it happened because there was some kind of discrepancy with the account.   Normal process, they collect the money into an account, think of it like escrow, and then send a list to the bank they work with to send the money to the payees (landlords).   The bank found the list had more money to send then the account had in it.   It is still undetermined why that is, but fraud/embezzlement/stealing has not been ruled out.   Bottom line, they didn't have the money to send to everyone.    hence declared bankruptcy to stop lawsuits as a result

    -  current status is that the trustee is trying to get information out of the owners.   There is a dispute over who owns the company, which is amazing, who was taking the profits?.   Some people say they walked away 2 years ago but the paperwork says different.   The people on the paperwork say they dont do anything day to day.   It is a mess.

    - The software system they used to collect the money was programmed by 1 person who was a consultant, not an employee, so they are having trouble understanding the root cause of the failure/fraud.  No one knows the system but the 1 guy and he is not required to help since he is not a principle of the company.  

    - My personal opinion, if you are owed money just assume it is gone.   By the time they establish ownership, count the money, and pay it out it will be years away and who knows how much will be left after the expenses.   

    Like I said, I am not a lawyer, just a layman reading the filings.  

    0Reply
  • Kimberly H.
    Residential Real Estate Broker · Chicago Suburbs, IL · Member since 2013 · 1k+ posts · 594 votes
    7y

    @John Nachtigall to be clear, the company  you are referring to above is not ERentpayment, but the company they outsourced to to collect the funds, called something like eCheckit?

    0Reply
  • Justine S.
    Boxford, MA · Member since 2017 · 6 posts · 6 votes
    7y

    Thanks for the update. I was able to recover, but since this fiasco I’ve switched to Zelle and could not be more happier. I don’t think I’ll ever go through a similar business again.

    0Reply
  • John Nachtigall
    Santa Rosa, CA · Member since 2017 · 325 posts · 701 votes
    7y

    @Kimberly H.

    Yes, good catch, I did not make that clear. CC Operations, LLC, doing business as eCHeckit, is the company in bankruptcy.   eRentpayment is not a party to the bankruptcy, they just are the company with the most money owed (which would then go to landlords).   Check Commerce is the bank that eCheckit was using.  The snippit from the early filing below kind of explains what happened.   Technically eRentpyament is a victim, although they choose to make a semi-guarantee and picked what turned out to be a very poor vendor to do the financial work.   This was a very early filing, the case has progressed since what is written below, but it is a good summary of the players.  

    ------

    TRUSTEE'S NOTICE OF THE STATUS OF THE CONTINUED POST-PETITION DEPLETION OF THE FUNDS IN THE ACCOUNT FROZEN BY CHECK COMMERCE

    Comes Now Michael Wheatley, as the Chapter 7 Trustee for the Estate of CC Operations,LLC d/b/a eCHECKit ("Trustee"), by and through counsel, and provides notice of the Status ofthe Continued Post-Petition Depletion of the Funds in the Account Frozen by Check Commerce:

    1. On October 19, 2017 ("Petition Date"), CC Operations, LLC d/b/a eCHECKit("eCHECKit") filed a Chapter 7 bankruptcy in the Bankruptcy Court.

    2. On October 27, 2017, the eCHECKit Trustee filed in the Bankruptcy Court anEmergency Motion Relating to Debtor's Frozen Account Held By Check Commerce and For Procedures to Prevent the Continued Post-Petition Depletion of the Funds in this Account [Doc.No. 19] ("Returned ACH Transactions Motion").

    3. The eCHECKit Trustee's Returned ACH Transactions Motion contends that eRentPayment, LLC made Internet posts encouraging its customers and customers' tenants to request return transfers of the rent payments they made prepetition, and the Motion further contends that eRentPayment, LLC's customers have requested an unusually large number of returned transfers of pre-petition funds, which process eCHECKit Trustee asserts should cease.

    4. Before the Petition Date, Base Commerce, LLC, successor in interest to Checkgateway, LLC ("Check Commerce"), held funds that eCHECKit instructed Check Commerce to collect on behalf eCHECKit's pre-petition customers, including eRentPayment, LLC.

    5. On October 16, 2017, Check Commerce suspended eCHECKit's ability to submitfurther transaction instructions by freezing the available funds in a reserve account.

    6. On or about Friday, October 20, 2017, Check Commerce was holding $4,282,541.93 111 funds in its reserve account relating to eCHECKit's obligations to its customers.

    7. On or about Monday, November 6, 2017, Check Commerce was holding $2,569,142.39 111 funds in its reserve account relating to eCHECKit's obligations to its customers.

    8. Between October 20, 2017 and November 6, 2017 $1,713,399.54 in returns have been paid from Check Commerce's frozen account, representing about 40% of the money held in the account on October 20, 2017.

    9. The returns are being paid from Check Commerce's frozen account at an average rate of $146,714.79/day.

    10. eRentPayment, LLC returns represent about 96% of all post-petition return transactions.

    11. On Thursday, November 2, 2017 we sent a proposed Order to eRentPayment, LLC's attorney, Theo Monroe, requesting that his client agree to remove the from its Website, Facebook posts and social media information instructing its tenants to request payment refunds through the ACH system.

    12. On Tuesday, November 7, 2017, we learned that Mr. Monroe was no longer representing eRentPayment, LLC and the business was looking to retain a new attorney.

    13. We have had no other communication with eRentPayment, LLC since then.

    1Reply
  • John Nachtigall
    Santa Rosa, CA · Member since 2017 · 325 posts · 701 votes
    7y

    I checked out the docket for the bankruptcy case and it turns out they entered into a settlement on Sep 16.

    https://drive.google.com/open?...

    eCHECKit is giving them $350,000 out of a "reserve" account and in exchange the trustee is dropping all further collection attempts (page 5 section 2).   I guess they were not that broke after all.  

    erentpayment agreed to drop their claim on the money that was lost in exchange for the trustee dropping their suit against erentpayment for all of the money "lost" when the tenets reversed the transactions (page 6 section 5c).

    So it looks like no recovery through the bankruptcy for any landlords out money.    I know there is a class action in Colorado against erentpayment by the landlords, but I don't know the status.   

    My take, as a complete non-lawyer amateur, is that the lawyers get paid out of the 350k and very little is left for anything else.  

    0Reply
  • Matt A.
    Investor · St Augustine, FL · Member since 2016 · 136 posts · 126 votes
    7y

    While I believe that erent handled this horribly and could/should have been communicating DIRECTLY with their customers instead of 'hidden' recitals in their support page (and also a Facebook group - who knew about THAT!), they did leave a couple of nuggets that essentially told everyone how the system works and how to get your money. That also was a good glimpse into the payment industry and how they operate... Like everything else there isnt a 'single throat to choke" when the wheels fall off.

    The lesson here is there is risk, and one should learn how to mitigate such risk. 

    Ive since moved very far away from erent and have a supplier that uses forte for payments. Its been an interesting journey nonetheless.

    0Reply
  • John Nachtigall
    Santa Rosa, CA · Member since 2017 · 325 posts · 701 votes
    5y

    So 3 years later it looks like this has come to an end

    erentpayments has agreed to pay $400,000 into a settlement fund and the court approved the settlement, but some of that is for the lawyers.   Per the court filing the bankruptcy trustee put pressure on the company to agree to the settlement so it was never litigated.  The original shortfall was ~3 million, so recovery will be pennies on the dollar (I assume) and payout in March 2021.  

    https://rentalpaymentclass.com...

    As bad as the class action result is, the bankruptcy of the processor is worse.   It is almost done.   The only person who benefited from the bankruptcy was the trustee (lawyer).   3 separate filings totaling more than $365,000 in compensation and fees.  The first 2 have paid out and the third is pending.    

    So basically everyone loses because the processor could not just stick to their job and make sure they had the money before they distributed it.  Very Sad.  

    2Reply
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