Vacation Rental Fraud – How It Happens And What You Can Do To Protect Yourself

by John I. Criste | February 2020

Charles PonziAs the adage goes, if it sounds too good to be true, it probably is. Some might say that is overly cautious. But when it comes to spending your hard-earned money on a vacation rental you found online, a certain level of caution might be appropriate.

There was a time when vacation rentals were advertised largely in classifieds or available only through your neighborhood travel agent. Now, with millions of vacation rentals available online, you can find and book one in almost any destination within minutes.

There are a few different online vacation rental platforms, but the concept is the same throughout: connect property owners with travelers in need of short-term accommodations. Most sites allow you to book immediately. You can check availability, reserve your dates, and pay for your reservation all on the same platform. For more expensive rentals, you might have to submit an inquiry to the owner. For many victims of vacation rental fraud, this is where the trouble starts.

Imagine planning your family’s dream winter vacation at a ski resort in Colorado. You’ve selected the ski resort that suits your needs and booked your flights. Now all you need is lodging. You find the perfect home, big enough for your family or friends, with all the amenities. And the best part is that it will cost less than the luxury hotel down the road! Knowing you have great deal you submit your booking request and hope for the best.

Later, you receive an email from someone you have no reason to believe is not the owner. They vet you (after all, this is their precious mountain home you want to use), so you feel a little more comfortable. You are anxious with anticipation hoping they approve your booking request.

Great news! The property is available, and your request has been approved! Time for payment.

The “owner” sends you wire instructions and asks you to prepay your stay to guarantee your reservation. You pause, but only momentarily because the deal is just too good to lose, and away goes the wire.

As your vacation approaches, you wait for information from the owner, but nothing arrives. You reach out but get no response. You are weeks, maybe days away from your winter wonderland vacation and have no idea where your rental is located or how to access it. Time to call the host website.

What happened? In short, internet fraud. Your dream vacation home may, in fact, be real. And it is likely even a legitimate listing on the host website. But fraudsters abound once your communications with “owners” begin. For example, an owner’s email or host-website account may have been compromised. In such cases, fraudsters try to induce payment through wire transfer, as opposed to using the website’s own payment system. An unwitting, first-time renter may not second guess a direct wire payment.

In other cases, entire listings are fake. Fraudsters go to great lengths to make a fake listing look legitimate. For example, the listing may include high-resolution photos of the property, detailed information about the neighborhood or city, and even reviews! The property might be real, but it is not actually available for rent. In these cases, the entire process, from booking inquiry to payment, is operated by a fraudster.

How can you protect yourself? In a word, vigilance. Watch out for a fraudster’s red flags. These include asking for payment via cash, check, or immediate money transfer like Western Union, MoneyGram, and bank transfers. Be wary of “owners” sending you an email with a link to payment instructions. These pages often look like a page within the host website, but they are not genuine. It is all part of the ruse.

Review the terms and conditions provided by the host website. They may have tips for more secure payment options, or even specific guarantees in instances of fraud. At a minimum, such a review will help you better understand what protections you have in the event of a fraud. If a listing appears suspect, or your communications with the “owner” becoming increasingly dubious, call the host website to verify the listing and confirm the owner’s information.

When in doubt, it is okay to be cautious. Remember, if it sounds too good to be true, it might be.

Kozyak Tropin & Throckmorton

John Criste
John focuses his practice on complex commercial litigation. He also has experience in various aspects of construction litigation. John received his Bachelor of Arts in political Science from Stanford University and his Juris Doctor, cum laude, from the University of Miami School of Law.

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