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Avoid fraud: Watch for online vacation rental scams

By Stephanie Wood
BridgeTower Media Newswires

DETROIT, MI — The vacation rental business is a multibillion dollar industry. Finding a house or condo to rent has become increasingly more convenient through the use of online marketplaces used by owners to list their rental properties. There are several of these websites out there to help consumers find their perfect getaway. The two most popular websites are HomeAway and VRBO. Most websites just require a small fee to list your property.
Visits to the HomeAway and VRBO websites total roughly 14.3 million and 18 million per month, respectively. With this much volume, consumers need to be cautious to ensure they are not becoming victim to a scam.

One scam that was recently in the news involved a woman from Naples, Florida, who reportedly rented a home that was listed on Craigslist. After paying $1,700 to the “owner,” the woman showed up to a home that was under construction. Upon arrival, the real owner told her she was the fourth person scammed into renting the property. The suspect was later arrested and charged with defrauding three different women out of a total of $26,000.

HomeAway and VRBO acknowledge that they are vulnerable to periodic scams. However, they are doing as much as they can to protect consumers. The company launched a secure communication system that hides both the renter and the owner’s email addresses. They also offer trip insurance, with several different levels of guarantees for small fees. Their website offers a variety of information on the measures they take to ensure secure transactions and how to avoid being caught in a scam.

Although vacation rental companies have controls in place to prevent scams from happening, it is even more important for consumers to understand the warning signs.

Types of vacation rental scams

The Federal Trade Commission received thousands of complaints over the past year related to vacation rental scams. In order to protect yourself, you must be aware of the different types of scams that are out there. The following are some common examples of vacation rental scams:

Phantom rentals: Property descriptions and photographs are stolen from real estate websites and addresses posted for homes that do not exist.

Fake advertisements: Advertisements for houses that are not available for rent. Renters pay in advance and show up to a house and meet the confused owner at the door.

Empty house rental: Scammers will post an advertisement for a house that they know is vacant.

Hijacked ads: Scammers access a rental listing and change the email address or other contact information, then place the modified ad on another site. This could also include hackers who are waiting to intercept the consumer’s email inquiry regarding a rental property.

Bait-and-switch rental: Showing unavailable properties, only to divert the renter to another, less desirable spot.

Double-booked properties: Accepting two reservations and sending the one who arrives last to a second-rate backup, even though they paid for the more desirable location.

How to protect yourself

When it comes to protecting yourself from a potential vacation rental scam, the Better Business Bureau suggests thinking about the following tips:

First and foremost, if it seems too good to be true, it probably is.

Remember to use a reputable website when searching for a vacation rental.

Do your research before committing to ensure the rental location is legitimate. Google the actual address of where you would be staying.

Verify that the same email address is being used across the internet whenever you see that specific property listed.

Read reviews. Don’t just trust what one website is telling you. Search multiple websites to read reviews on the company you are thinking about using. You may also want to ask the owners for referrals from previous renters.

Get your contract in writing. Before paying for anything, be sure your rental agreement is in writing and review all the terms to ensure that it specifies the dates you will be staying, the cost of the rental, any deposits, taxes, cleaning fees, and the cancellation and refund policies.

Don’t pay up front. Full payment for the rental should not be required up front. If a down payment is required, be sure to use a credit card or PayPal in case the charges need to be disputed. Never use a wire transfer or debit card to make this payment.

Social Security numbers, bank account numbers and credit card numbers should not be required for the rental.

If the property is part of a homeowners’ association, contact the group’s leader to verify that the person you are corresponding with is the real owner.

Be skeptical

Whether you are looking to book a last-minute trip or you are starting to plan your summer vacation, be sure to take your time when searching online for the perfect vacation spot. With the number of options made available to consumers, it’s important to remain skeptical of the opportunities presented through these websites. Although companies are doing everything they can to prevent hackers from getting in, consumers should understand that scams continue to evolve and become more sophisticated as hackers learn new techniques.

If you suspect you are a victim of a vacation rental scam, you can report it to the Federal Trade Commission at www.ftc.gov/complaint. If it was an ad that you clicked on, you should also report the fraud to the website where you found the advertisement.

Stephanie Wood is a CPA and manager with EFPR Group LLP in New York.

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