Storage Unit Scams

Storage unit scams to watch for

Storage unit scams target three types of victims: renters, buyers and operators. Renters (called tenants) are at risk of pricing scams and theft, auction buyers may be duped by staged units, and operators should protect themselves against deceptive tenants who sue over wrongful sales.

Hidden fees and bait pricing

Rental agreements spell out the monthly cost of the storage unit, but these contracts may also contain hidden charges such as lock rentals, insurance, utilities and security fees. Renters should read their storage unit contract carefully before signing, and they should be aware of promotional pricing (such as the first month free), especially if rates will rise dramatically after the promo period ends.

Payment obstruction and forced default

Facility operators may try to scam tenants by making it difficult to pay, causing them to default. Operators may refuse to accept payments over the phone, claim “system issues” with an online payment method or neglect to send invoices on time. They may then assert their right to place a lien on the unit and later sell it.

Theft and employee involvement

As at other workplaces, employees or operators of a storage facility can steal items. This can happen through shear negligence, a lack of security or direct participation by the workers themselves. Since most renters don’t visit their unit regularly (or at least don’t check the inventory of their stored belongings regularly), they may not notice for months if something is missing.

Fake listings and deposit scams

The “fake listing” scam targets auction buyers. Auctioneers post pictures of a nonexistent storage unit and when it’s bid upon, ask for a deposit to “hold” it. Sometimes the photos are staged with empty boxes or they’re of older units that are no longer available.

Storage unit scams at auctions

The “staged unit” auction scam is increasingly prevalent. This when units are filled with seemingly high-value goods that turn out to be empty boxes or contain different items in order to artificially inflate the price of lots for buyers at auction.

Since these lots are almost always sold “as is,” there’s little recourse for the duped buyer. So if you participate in a storage auction as a buyer, it’s crucial to review the auction terms ahead of time. Failing to do so could cause you to lose money on the unit cost, taxes, auction fees or cleaning deposits.

Reputable auction sites should take steps to prevent these from happening by flagging suspicious items, only working with reputable storage companies or employing technology to prevent “shill bidding" where scammers try to artificially drive up the price.

Photo cues that signal staging 

Many storage unit auctions happen online, so you must scrutinize the posted photos carefully. The following signs don’t always indicate a scam, but they can raise red flags:

• Visible brand-name boxes
• Suspiciously organized contents
• High-value items prominently displayed
• Multiple items that look too good to be true
• Overly-clean units 
• Photos taken from only one angle or viewpoint

What to document at unit opening

If your auction bid is successful, you’ll have a set amount of time (typically 24 to 48 hours) to claim and clear out the storage unit. When opening the unit for the first time, follow these guidelines to protect your investment and avoid disputes:

• Take high quality photos or videos of everything in the unit
• Don’t open any sealed boxes until you’ve looked through everything
• Get a receipt after you pay; most auction sites require payment before you get the key to the unit
• If you find any personal documents that belonged to the original owner, turn these over to the facility operator immediately
• Take another photo after you’ve emptied the unit; in most cases, you're responsible for leaving it in “swept condition”

Storage lien sale scams and wrongful sale

Storage lien and wrongful sale scams target facility operators and are perpetrated by tenants. If a tenant defaults on their rent, the facility can place a lien on the unit and eventually sell it at auction (called a lien sale). If the sale isn’t done in strict compliance with state law, renters may have recourse to sue for their missing items.

How the wrongful sale scam works

A wrongful sale scam happens when a tenant intentionally defaults, often after accepting a heavily-discounted initial rate. When the facility sells the unit due to nonpayment, the tenant then sues the operator, claiming they didn’t follow state law and the sale was “wrongful.”

Scammers look for minor procedural errors they can use as the basis for litigation, so storage operators must stay in strict compliance with self-storage lien laws in their state. Common errors include:

• Timing violations on notices of default
• Using outdated contact information for the renter
• Omitting legal language that’s required by state law
• Failing to notify a secondary contact (if one is listed in the rental agreement)
• Failing to provide a detailed inventory; scammers sometimes produce artificial inventory lists to claim the value of goods was higher than it was

Steps operators can take to comply

If you own or operate a self-storage facility, take the following steps to protect your business:

• Ensure your rental agreement clearly lays out the state laws and procedures for nonpayment, liens and auctions.
• Keep copies of all notices of default, including the amount owed, when they’re sent and the delivery method used. 
• Follow all timing requirements about when you can send default notices.
• Verify military status; it’s illegal to sell an active-duty servicemember’s belongings without a court order.
• Follow state rules for advertising the auction.
• If you’re in a state with complex lien sale statutes such as California, New York, Nevada, New Mexico or Minnesota, pay extra attention to compliance.

Storage unit scam warning signs

If you need to rent a storage space, you should always work with a reputable facility to protect yourself from scams. The following tips can help you identify potentially fraudulent storage facilities, suspicious contract terms, and conditions that suggest poor security or potential theft issues.

Red flags to check before renting

1. Pricing that seems too good to be true, especially deeply-discounted first months
2. Lack of clear contact information, physical address or verifiable business presence
3. Poor or nonexistent online presence, reviews or facility photos
4. Vague or missing contract terms about fees, rate increases and default procedures
5. Facilities in sketchy areas with broken surveillance, unmanned entrances or poor visitor security
6. Fine print that shifts all responsibility to renters or allows unlimited rent increases
7. Operators who are evasive about showing units or providing detailed lease terms
8. Facilities with reports of infestations, leaks or inadequate climate control

» MORE: How do storage units work?

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