Attorney General Bonta Announces Settlement with Room Rental App for Purchasing Fake Online Reviews and Falsely Claiming Verified Listings

OAKLAND – 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 Shriber and Roman Zaks. Roomster is a room- and roommate-finding platform that primarily advertises private rooms in cities and towns across the globe. The company targets lower-income renters for whom Roomster acknowledges that “every penny counts.” Roomster makes money by charging a subscription fee to potential renters for the ability to message potential roommates or landlords. On August 30, 2022, the coalition sued Roomster, alleging that the company violated federal and state consumer protection laws — including California’s False Advertising Law and Unfair Competition Law — by purchasing thousands of fake positive reviews to promote its app and fraudulently claiming that its room and roommate listings were “verified” and “authentic.” Today’s settlement resolves the August 2022 lawsuit and requires substantial changes to Roomster’s business practices.

“Our coalition’s investigation revealed that Roomster was, in simple terms, conning people seeking rental housing. That’s why we sued the company last year. Today, as a result of the hard work by our legal teams, we’re holding Roomster accountable for its illegal conduct,” said Attorney General Bonta. “With California experiencing a severe housing crisis, every part of the puzzle matters — from ensuring every city in the state follows the law and builds their fair share of housing, to making sure that fraudsters don’t get in the way of people finding rental housing." 

Under the settlement, Roomster and its owners, Shriber and Zaks:

• Will pay $1.6 million to California and the other state plaintiffs for consumer restitution, consistent with their alleged limited ability to pay. 
• Have agreed to the entry of a suspended judgment of more than $47 million. This money will be payable if Roomster, Shriber, or Zaks fail to make a timely payment, violate the settlement’s injunctive terms, or are discovered to have misrepresented their financial condition in the course of settlement negotiations.
• Are prohibited from paying for or incentivizing reviews; using interested or biased reviews to promote Roomster’s services; misrepresenting listings; or otherwise making any other material misrepresentations to consumers. These injunctive terms also apply to any subsequent entities created by Shriber or Zaks.
• Will be required to monitor and promptly cease doing business with any affiliates who engage in unlawful or deceptive practices. 

Roomster's platform is accessible either on Roomster’s website, or through iOS and Android mobile apps available in the Apple iTunes and Google Play stores, respectively. The coalition previously announced a related settlement, which resolved allegations that Jonathan Martinez — owner of the review sales business AppWinn — and AppWinn violated the False Advertising Law and Unfair Competition Law by promoting Roomster through fake online reviews posted in the Apple and Google app stores. As part of the settlement, Martinez was required to comply with strong injunctive terms to deter future misconduct and pay $100,000 to the states.

Attorney General Bonta joins the FTC and the attorneys general of Colorado, Florida, Illinois, Massachusetts, and New York in announcing today’s settlement.

A copy of today’s settlement, which is subject to court approval, is available here.