MELBOURNE, Fla. – With affordable housing increasingly out of reach, tiny homes have surged in popularity – and so has tiny house fraud. A News 6 investigation found scammers are stealing images from a local manufacturer and using them to swindle prospective homebuyers out of thousands of dollars.
At Movable Roots in Melbourne, workers have been building custom modular homes for a decade. Now, crooks are trying to cash in on that success.
“They’re taking advantage of people not doing their due diligence,” said Mike Cheatham of Movable Roots.
Fake listings, real losses
Dozens of ads for tiny homes appear on Facebook Marketplace, and Cheatham says photos of Movable Roots’ custom builds are showing up there – and on fake websites – at rock-bottom prices.,
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Investment fraud targets the human desire for financial growth by promising high returns with “low to no risk.”
- Ponzi Schemes: Named after Charles Ponzi, these schemes pay “returns” to earlier investors using the capital brought in by newer investors. There is no actual underlying business; the system collapses when new recruitment slows down.
- Pyramid Schemes: Similar to Ponzi schemes, but participants are usually required to sell a product or service. The primary “profit” comes from the recruitment fees of new members rather than actual product sales.
- Pump and Dump: Fraudsters spread false, positive rumors about a cheap stock (the “pump”) to drive up the price. Once the price peaks, they sell their shares (the “dump”), leaving other investors with worthless stock.