Landlords are used to hearing “the check is in the mail.” But a handful of landlords are suing a Fort Collins payment processing firm after the rent checks got lost somewhere in cyberspace.
Boulder resident Ying Li, New York resident Todd Wasulko, Georgia resident Rasheda Mayner and Arizona resident Manish Singh filed suit against eRentPayment in Larimer County District Court in December.
The plaintiffs, all landlords who had tenants paying rent through the site, claim tenants paid using eRentPayments through its website but they never received their October rent payments.
They are seeking class-action status.
eRentPayment was founded in 2004, and charges a fee for transactions made through the site. In addition to facilitating rent payments, it provides other services like tenant background checks.
The lawsuit revolves around payments allegedly submitted by tenants using eRentPayment, but not received by the plaintiffs, between Oct. 3 and Oct. 17, 2017.
The plaintiffs initially assumed the payments were delayed, but ultimately concluded they were “lost forever due to the wrongful actions of eRent,” according to the lawsuit. They say they each are owed between $1,150 and $3,125.
The lawsuit says eRentPayment’s website “creates the impression” that it manages its payment-processing system, but actually contracted with a third party, which does business as eCheckit, for those operations.
eCheckit then contracted with another vendor, which does business as Check Commerce, to do the payment processing, according to the lawsuit.
In late September or October 2017, Check Commerce suspended eCheckit’s ability to process payments “due to alleged irregularities with the debit and credit instructions it was submitting on behalf of eRent and others,” according to the lawsuit. Check Commerce then froze all unsettled funds.
The lawsuit says the situation appears to have happened because eCheckit was “the victim of a hacking, data breach, fraud, or other wrongful act that resulted in the theft of potentially millions of dollars,” some of which were rent payments made through eRentPayment.
Hundreds, possibly thousands, of landlords did not receive rent payments made during the two-week period, according to the lawsuit.
eRentPayment is run by Rick Sands. The company did not respond to a request for comment.
In October, Sherrie Mills, a Denver realtor who owns investment properties, said she and her husband were missing $4,000 in rent because of eRentPayment.
Mills said this week that the couple ended up receiving the funds in late November, after tenants contacted their respective banks to dispute the payment as an “incomplete transaction.”
“It ended up taking hours of time, and the tenants honestly didn’t have to do it,” Mills said. “It wasn’t their problem.”
Mills said she no longer uses eRentPayment, and has been unable to find something comparable on the market. For now, she said, her tenants are sending her rent through Venmo.