Auckland – California Attorney General Rob Bonta, along with the Federal Trade Commission and five other state attorneys general, today announced a settlement with Roomster and its owners John Shriver and Roman Sachs . Roomster is a room and roommate finding platform that primarily advertises private rooms in cities and towns around the world. The company targets low-income renters, whom Roomster admits “values every penny”. Roomster makes money by charging potential renters a subscription fee so they can message potential roommates and landlords. On August 30, 2022, the Coalition sued Roomstar, accusing the company of buying thousands of fake positive reviews to promote its app and falsely claiming Roomstar’s services to California. It alleged that it violated federal and state consumer protection laws, including state false advertising and unfair competition laws. The roommate list is ‘verified’ and ‘genuine’. Today’s settlement resolves the August 2022 litigation and requires significant changes to Roomstar’s business practices.
“Our coalition’s investigation revealed that Roomster, simply put, was defrauding people looking for rental housing. That’s why we sued the company last year. “Today, after the hard work of our legal team, we have decided to hold Roomstar accountable for their misconduct.” said Attorney General Bonta.. “With California facing a severe housing crisis, scammers are trying to get people to buy rental properties from ensuring that every city in the state follows the law and builds their fair share of homes. Every piece of the puzzle is important, down to keeping things out of the way to find ‘housing. ”
Under the terms of the settlement, Roomster and its owners Mr. Schreiber and Mr. Sachs said:
- It will pay $1.6 million in consumer damages to plaintiffs in California and other states, consistent with its alleged limited ability to pay.
- Agreed to enter an injunction of over $47 million. This money will be available if Roomster, Schreiber, or Sachs fails to make timely payments, violates an injunction to the settlement, or is found to have misrepresented its financial position during the settlement negotiations. will be paid.
- You may not pay for or encourage reviews. Use interesting or biased reviews to promote Roomster services. false listings; or otherwise materially misrepresent consumers. These injunctions also apply to any subsequent entity created by Shriber or Zaks.
- You are expected to monitor affiliates that engage in illegal or deceptive behavior and immediately stop doing business with them.
Roomster’s platform can be accessed through Roomster’s website or through iOS and Android mobile apps available on the Apple iTunes store and Google Play store respectively. The coalition previously said Jonathan Martinez, owner of review sales business AppWinn, and AppWinn promoted Roomster through fake online reviews posted in Apple and Google app stores, violating false advertising and unfair competition laws. announced a related settlement to resolve allegations. As part of the settlement, Martinez was required to comply with strong injunctions to stop future wrongdoing and to pay each state $100,000.
Attorney General Bonta joins the FTC and Attorneys General from Colorado, Florida, Illinois, Massachusetts and New York in announcing the settlement today.
A copy of today’s proposed settlement is available, subject to court approval here.