BEWARE of fraud by erentpayment.com
Karen HigginsPro Member
Minneapolis, MN · Member since 2017 · 83 posts · 89 votesBEWARE of fraud by erentpayment.com
Most Popular Reply
Property Manager · Blaine · Member since 2015 · 209 posts · 276 votes
8yMy 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.
345 Replies
- Rental Property Investor · Clarkston, GA · Member since 2012 · 2k+ posts · 1k+ votes8y
FWIW erent has a face book page. search "erentpayment" and there is a new customer side problems discussion group "erentpayment discussion group".
We're out around $6k. From my reading:
- customers / tenants who tried as they where told by erent to attempt to dispute the ACH where told by their bank they can't. This avenue may be closed.
- The problem bank may declare bankruptsy
- Erent said the stuck cash is covered by insurance
- Landlords are recommended to put ALL properties in "blocked state". I don't feel deleting the bank tag makes sense. On the off chance erent will need the property config setup to straighten this all out. The more we distroy the harder it may be, but just my guess.
- My guess, don';t go quoting me and light your hair on fire, my guess is that any stuck cash will take months to get back... Pop a beer, follow the face book groups, and go about ramping up more rentals.
- Pick a new way to collect rent for November. Perhaps a stop gap of have everyone mail checks (choke!!!).
** I'm not able to say who, but the site that I use to collect applications and tenant screen, has inked a deal with a BIG rent processor with ideal timing SAME DAY XFER and typical of next day xfer. I'm going to be a beta tester. FWIW I don;t suggest jumping to cozy.co just yet... Cozy's 5-7 day lag has kept me at erent.... Timely this new service is working on being available to us small folks with 1-50 units. The processor was only available to really big apartment owners, 1500 doors+... More on this later. **
- Investor · Mount Pleasant, SC · Member since 2015 · 3 posts · 12 votes8y
Originally posted by @Audrey Ezeh:
Originally posted by @Samantha Klein:
Thank goodness I don't use online rent collection like ERP. I tried it and it was not working so well because tenants didn't always have all of the money when Cozy would pull it and it would cause delays in whether rent payments failed or not. I wouldn't know until the 6th or so if rent was actually paid.
I decided to open a rent collection bank act locally and have all of my tenants deposit rent on their time. It has been working much better and now I spend less time chasing tenants and more time growing my business.That is what I am transitioning to. I am closing on Friday on 5 units and I set up a business account last week for them. They do not need an account number, just my business name is all they need to make the deposit. I do wonder, how do you differentiate payments when the rent is the same? I have not gotten around to checking with my bank but can they write a 'memo' stating their name, that way I know to whom to credit the rent? Have you had this problem and figured out a solution?
- Investor · Mount Pleasant, SC · Member since 2015 · 3 posts · 12 votes8y
Best way I've found (15 unit complex, all rents the same).....make the monthly payment (in the lease) the rent amount PLUS .xx cents for the unit number. Ie unit 12 pays 700.12, unit 4 pays 700.04, etc.
- Investor · Boston, MA · Member since 2015 · 1k+ posts · 3k+ votes8y
Unpopular opinion, but this issue with ERP further illustrates the fact that investing in RE is not a hobby, but a business and caveat emptor always applies. If you don't understand how your rent payment end up in your account you better have enough reserves set aside until you can figure it out when things go sideways.
Is it truly unfortunate that eCheckit is filing bankruptcy and any payment submitted between 3-12 Oct are being held by Check Commerce? Yes. However, this not a unique situation. Plenty of other business have accounts payable that are 60, 90, 120+ past due. Vendors ship things late or not at all. It is part of business.
@Matthew Olszak still isn't wrong. By the facts showing in this post ERP still has not committed fraud: From Blacks Law dictionary:
All multifarious means which human ingenuity can devise, and which are resorted to by one individual to get an advantage over another by false suggestions or suppression of the truth. It includes all surprises, tricks, cunning or dissembling, and any unfair way which another is cheated.
Are they guilty of poor communication: YES, terrible customer service: YOU BET. Changing their story: ABSOLUTELY. Being in business isn't like buying from Amazon; things are not always a one click experience.
- Saint Peters, MO · Member since 2017 · 3 posts · 0 votes8y
I need to share my story. My apologies if this is not professional. I am renting my former residence out because I could not sell it, and I wanted to do the right thing as opposed to letting it go into foreclosure. My tenants have poor credit but good intentions and wanted to use e-rent because they could opt in to have their payments reported to the credit bureaus. I agreed, and now fast forward to the debacle this thread is dedicated to. Erent has my tenant's payment, and of course my tenant can't afford to pay me twice. I sent the mortgage payment off to my lender already in good faith. So now I can't pay my PERSONAL bills until this is resolved, and that does not look promising. What am I supposed to do? I can't float this $1000+ for long. (I have not been doing this long enough to have "bigger pockets" yet.)
Erent has handled the situation poorly to say the least. They have even collected my $3 transaction fee despite the fact they did not pay me the transaction. I know it's a small amount, but it would go a long way towards goodwill if they would credit that back.
My tenants are on board with trying to get their bank to reverse the transaction and will pay me directly next month. But I'm afraid I'm going to just be out this money in the long run, and that is something I can ill afford. This is not just an inconvenience for me. I'm wondering if I will be able to buy groceries this month.
And last, a plea for advice. Is it ethical in this circumstance to use my tenant's security deposit until erent makes good on the payment? What if erent NEVER makes good on the payment?
- 8yJoseph ODonovanPro MemberProperty Manager · Ridley, PA · Member since 2017 · 427 posts · 449 votesNot so good news folks; CC Operations, LLC, Owner of eCheckit filed for Chapter 7 Bankruptcy today, Wednesday Oct 18th in the Kentucky Western Bankruptcy Court. I'm not an attorney but Chapter 7 is a liquidation filing where the Trustee sells all assets of the filing party and then pays creditors a portion of their claim. This particular situation gets complicated as there are many middlemen involved in the financial trail of rents paid. That being said, I would not be surprised if another company or two suffers financially to the point of insolvency. I'm not certain of eCheckit's relationship with eRentpayment other than being a vendor. For those LL's with lost rents, I would contact every company involved and question their insurance policies and start looking for an attorney.
- Syracuse, NY · Member since 2015 · 32 posts · 33 votes8y
Patricia, I feel your pain... trust me. To my understanding, you won't be able to use the security deposit for this situation. Security deposits are used in case the tenant leaves the unit messed up or they didn't pay rent. In this case, they paid. The money, through no fault of their own, didn't arrive to you and the company responsible already admitted that it was fraud.
If your tenant gives you permission, you may be able to use the security deposit to cover the rent, but that means you'll have to deal with expenses out-of-pocket in case something else goes wrong during their tenancy. Speak to a real lawyer, though. I'm just going by the laws in my little town.
And a side note: To the people who are part of the Facebook group, please keep us informed of what you find on this thread. Some of us don't have Facebook. Thanks!
- Real Estate Investor · Tempe, AZ · Member since 2012 · 874 posts · 648 votes8yWhat an awful situation. To those sounding the alarm, thanks. Hopefully you saved someone from the complications you yourself are experience. That's little consolation, though... As I read the first few posts, all I could think was, "this is MF Global. Everything has surely gone 'poof.'" Sad to be correct. @Patricia DiMercurio check your landlord tenant act. In some states, the security deposit needs to be held in a true trust account, in others it doesn't. Maybe post in a local forum here on BP to attract local opinions.
- Investor · Schenectady, NY · Member since 2015 · 14 posts · 2 votes8y
Thank God, this is just an inconvenience for me. I feel terrible for all the landlords (and tenants) that have been affected by this event.
- Pensacola, FL · Member since 2017 · 26 posts · 50 votes8y
Originally posted by @Bill F.:
Unpopular opinion, but this issue with ERP further illustrates the fact that investing in RE is not a hobby, but a business and caveat emptor always applies. If you don't understand how your rent payment end up in your account you better have enough reserves set aside until you can figure it out when things go sideways.
Is it truly unfortunate that eCheckit is filing bankruptcy and any payment submitted between 3-12 Oct are being held by Check Commerce? Yes. However, this not a unique situation. Plenty of other business have accounts payable that are 60, 90, 120+ past due. Vendors ship things late or not at all. It is part of business.
@Matthew Olszak still isn't wrong. By the facts showing in this post ERP still has not committed fraud: From Blacks Law dictionary:
All multifarious means which human ingenuity can devise, and which are resorted to by one individual to get an advantage over another by false suggestions or suppression of the truth. It includes all surprises, tricks, cunning or dissembling, and any unfair way which another is cheated.
Are they guilty of poor communication: YES, terrible customer service: YOU BET. Changing their story: ABSOLUTELY. Being in business isn't like buying from Amazon; things are not always a one click experience.
Umm what do you consider fraud?
By your definition:
1.) Get an advantage over another by false suggestions or suppression of the truth:
A.) He took in people's money and said they delay was due to a bank swap...this was determined to be a lie
B.) He then stuck with said story for 4 business days after the last affected transactions and didn't break the "bankrupt 3rd party" story until COB on the 4th day...wonder why he would do that. SURPRISE!!! He just found out about it then but had been delaying since the 12th.
C.) He never notified tenants of what was happening with their payments...wonder why...maybe has to do with buying 4 business days and having their transactions tagged as merchant transactions...which means only erentpayment can put in "reverses"....do you really think they are going to do that for their customers?
D.) I don't think I need to go into how some feel cheated but if you don't believe this was fraud I might have to explain it in a later post...
So he lied about why the delay was happening...even had some on here calling people "mobs" for not believing said Lie. He suppressed the the truth by not telling landlords/tenants what was really going on....do you honestly think Echeckit just woke up Oct. 18th and said hey we are filing for bankruptcy! Continuing the lie for those 4 business days locked tenants out of reverses.
I mean I don't know what else needed to or should have happened for this to be considered fraud.
- Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes8y
I know there was already another thread on this subject but kudos to the OPs to get this back in the spotlight.
I personally have used E-rentpayment in the past without any issues. My last tenant using it bought a house and I hadn't had any new renters use the service. That is apparently fortunate for me. Everyone we have using electronic payment at this time is using Cozy. Missing rent wouldn't break me either way but I sure as hell would be unhappy about the situation.
What I am curious to know: according to E-rent's support site statement, the payments affected go from October 3 through October 12. That means anything after October 12 should be fine, according to them. If anyone here is using E-rent, and had a tenant submit a payment on the 13th or later, please report back here and let us know if anything has happened.
One other note: any reputable business should have reserves to cover business difficulties. If this company operates on such a shoestring that it cannot cover 9 days worth of submissions, it is not a company worth doing business with.
EDIT: E-rentpayment does not answer the question of getting a new payment processor in their "explanation". That alone should be reason for everyone to stop doing business with them immediately.
Skyline Properties - Investor · Orlando, FL · Member since 2017 · 18 posts · 16 votes8y
I had two tenants submit payments on the 13th or later. I would have expected the first one to clear by now, and the second one to clear today. So far nothing has posted to my account. I did see that they cancelled the $3 fee on both. I will update if the payments clear my account.
- Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes8y
Originally posted by @Tracey Smythe:
I had two tenants submit payments on the 13th or later. I would have expected the first one to clear by now, and the second one to clear today. So far nothing has posted to my account. I did see that they cancelled the $3 fee on both. I will update if the payments clear my account.
Excellent, please keep us posted here. Your situation is a good test of whether or not the company is completely full of crap or there's some truth to what they are saying. Either way, however, the fact that they do not address the payment processor situation is a massive red flag - if their processor, Echeckit, is filing for bankruptcy, who is their new processor? They don't say one way or the other on their "support" page. My guess is that there *is* no new processor, because that would be the first thing you would do as a business seeking to reassure customers that this was a one-time blip.
Skyline Properties - Rental Property Investor · Greenville, SC · Member since 2017 · 185 posts · 178 votes8y
Originally posted by @Matthew Olszak:
Oh for crying out loud. I'm not associated with them, but have been watching this play out. They changed banks. When someone opens a new bank account and makes substantial deposits suddenly, the bank holds the money (as they legally can) for a certain period of weeks to protect themselves from fraud until a relationship is established. That's what I believe is going on - the new bank is holding the funds in their account, so there are no funds to forward to yours.
Bad/novice business planning, yes. Fraud, hardly. Put out the torches and let the folks spend time getting their affairs in order to resolve this problem vs. handling the mob reaction.
Not always. Normally a company like that will have significant funds in their accounts and will not carry over any higher amount with cash or personal/business checks. They will always use cashiers checks or wire the money. Both can be made available immediately. And their lack of communication is a big red flag. I appreciate them calling the company out if things aren't being handled like they should.
I work at a bank. This doesn't sound right.
- Rental Property Investor · Greenville, SC · Member since 2017 · 185 posts · 178 votes8y
Originally posted by @James Baker:
Originally posted by @Audrey Ezeh:
Originally posted by @Samantha Klein:
Thank goodness I don't use online rent collection like ERP. I tried it and it was not working so well because tenants didn't always have all of the money when Cozy would pull it and it would cause delays in whether rent payments failed or not. I wouldn't know until the 6th or so if rent was actually paid.
I decided to open a rent collection bank act locally and have all of my tenants deposit rent on their time. It has been working much better and now I spend less time chasing tenants and more time growing my business.That is what I am transitioning to. I am closing on Friday on 5 units and I set up a business account last week for them. They do not need an account number, just my business name is all they need to make the deposit. I do wonder, how do you differentiate payments when the rent is the same? I have not gotten around to checking with my bank but can they write a 'memo' stating their name, that way I know to whom to credit the rent? Have you had this problem and figured out a solution?
We have the renters write their address or last name on the deposit slip before we scan it. You can always pull up images of your deposit slips and the checks. That way you can see who paid. Talk to your banker to see how they can have this done for you. Every bank works slightly different. Good luck
- Investor · Grosse Pointe Shores, MI · Member since 2017 · 160 posts · 74 votes8y
If this is fraud, it's the dumbest fraud scheme I've ever seen. If you wanted to steal your customer's money, you'd take little bits at a time so you could theoretically do it for a long time without detection. Not grab it all at once and hope nobody notices.
Most likely, it's a behind the scenes decision that wasn't thoroughly researched before it was implemented. A rookie move that could potentially sink their company.
- Investor · Boston, MA · Member since 2015 · 1k+ posts · 3k+ votes8y
Don't think I'm defending ERP. If I did businesses with them I would leave due solely on their atrocious handling of the situation and I'll bet ERP doesn't surive. The fraud aspect was not main point of my post. I pointed out how this situation is a concrete example of the importance of cash reserves.
To your points:
1. Not my definition, but Blacks Law dictionary.
2. In my non-lawyer and totally unqualified opinion, ERP has not gained any material advantage over its customers. They don't show any intent to get an advantage nor did they gain anything. Lying in and of itself is not a crime. Has ERP been the victim of fraud by eCheckit? Maybe. The press release said that EChekit: "suffered losses due to a fraud and that its processor, Check Commerce, has held over $4 million of it's funds and will not release the funds to the intended recipients at this time." So once this whole thing gets sorted out that $4M may reappear. Check this article out, that talks about the three elements of fraud: https://www.journalofaccountancy.com/issues/2004/o...
3. I understand how you feel cheated and can sympathize with the emotion, but the law doesn't care about your feelings.
- Real Estate Broker · Fort Wayne, IN · Member since 2016 · 88 posts · 41 votes8y
I think there's a lingering question that needs to be answered. I didn't read everything word for word and didn't see this mentioned but how do you delete your account? I have went through all of the options and can't find it nor can I delete my bank account (I only have one linked).
- Pensacola, FL · Member since 2017 · 26 posts · 50 votes8y
Originally posted by @Bill F.:
Don't think I'm defending ERP. If I did businesses with them I would leave due solely on their atrocious handling of the situation and I'll bet ERP doesn't surive. The fraud aspect was not main point of my post. I pointed out how this situation is a concrete example of the importance of cash reserves.
To your points:
1. Not my definition, but Blacks Law dictionary.
2. In my non-lawyer and totally unqualified opinion, ERP has not gained any material advantage over its customers. They don't show any intent to get an advantage nor did they gain anything. Lying in and of itself is not a crime. Has ERP been the victim of fraud by eCheckit? Maybe. The press release said that EChekit: "suffered losses due to a fraud and that its processor, Check Commerce, has held over $4 million of it's funds and will not release the funds to the intended recipients at this time." So once this whole thing gets sorted out that $4M may reappear. Check this article out, that talks about the three elements of fraud: https://www.journalofaccountancy.com/issues/2004/o...
3. I understand how you feel cheated and can sympathize with the emotion, but the law doesn't care about your feelings.
Honest questions:
1.) Are we to believe that he had no clue this company was going bankrupt? That they decided on Oct. 18, 2017 to inform Erentpayment that they were going under...mind you this is 15 days after "issues of a bank swap" were first posted on their support page.
2.) If you believe that Erentpayment did know about the situation yet continued to collect tenant payments and run them through echeckit does that change your opinion?
3.) Why say all these issues are due to a bank swap that is between Erentpayment and 2 banks then completely flip the story 4 business days after your "last" affected transactions? ...mind you that neither echeckit or check commerce are "banks"
4.) Why lie if you've got nothing to hide? Especially in this case, I personally would have taken it a lot better if they had informed us of an impending bankruptcy on Friday the 13th so my tenants that had rents withdrawn on the 11th might have time to reverse/cancel them. It all leads back to the question.
5.) Why milk the bank swap story for 4 extra business day?
- Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes8y
Originally posted by @Aaron Van Curen:
I think there's a lingering question that needs to be answered. I didn't read everything word for word and didn't see this mentioned but how do you delete your account? I have went through all of the options and can't find it nor can I delete my bank account (I only have one linked).
Go to "Profile" "Manager Accounts" , click your name. When it comes up it will show you the properties set up to accept money from that account. Go to each property and clear the account set up. After you do that, come back to this same screen and you can "purge" the accounts so that only your routing number remains, but your checking/savings account number is gone.
Skyline Properties - Real Estate Broker · Fort Wayne, IN · Member since 2016 · 88 posts · 41 votes8y
@JD Martin sadly, the box is still grayed out and the system won't let me purge the bank account.
- Investor · Boston, MA · Member since 2015 · 1k+ posts · 3k+ votes8y
Honest Answer: You are spending a lot of time worrying and thinking about someone else poor business decisions. What ERP did or did not know, when they knew it, and why they said/did the things they did at this juncture are of no consequence. The lawyers and judges in the case, and maybe a jury, will care, but that won't be you or I. Sometime down the line all your questions may be answered, but that time isn't now.
Focus on the constructive, like how will you collect rent in the future ( I recommend Rentalutions, they do screening, leases, and rent collection) or learning how ACH payments are processed so you can become a better business owner than those at ERP. After action your systems and process to see what you could change to insulate yourself from an issue like this or at least mitigate it.
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