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Home / Expert Opinion / Fraud Facts: Vacation rental scams more prevalent with targeted websites

Fraud Facts: Vacation rental scams more prevalent with targeted websites

Stephanie Wood

Stephanie Wood

The vacation rental business is a multi-billion 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. One of the largest, Vacation Rentals by Owner (VRBO)/Homeaway, generated approximately $350 million in revenue last year. To list on their website, owners just need to pay a small annual fee.

Although these websites provide easy access for booking vacations, it also creates the opportunity for scammers to target consumers.

VRBO/Homeaway acknowledged that they have experienced more than 3,000 successful scams over the course of the past year. One family who used the site reported that they reached out to the alleged owner to ask a few questions and got a response that did not answer the questions, but offered a hefty discount if the family signed a contract and paid in full up front. Luckily, the family was skeptical enough to contact the company and question the response they got, saving them from being a victim to the scam.

To help protect consumers, VRBO/Homeaway reported that they launched a secure communication system that hides both the renter and the owner’s email addresses. The company also offers insurance, guaranteeing up to $1,000 of coverage for free and up to $10,000 for a $39 fee.

Many other consumers are not as lucky as the family mentioned above. A couple from California used to book a vacation to New York City. The rental opportunity seemed like a good deal. However, the manager of the rental asked the couple to wire the money to England. The couple went ahead and wired the money, only to find out that the address was that of a random person’s house in London who was not affiliated with the rental listing. When the couple went back to the Internet to get to the listing, it was no longer there. The apartment the couple was looking at was a real listing, but the actual owner never got their inquiry.

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, or the owners are on vacation.

Hijacked ads – Scammers who access a rental listing and change the email address or other contact information, and 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 – Displaying 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 considering 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 homeowner’s association, contact them to verify that the person you are corresponding with is the real owner.

Be skeptical

Whether you are looking to book a last minute holiday getaway, or you are starting to plan next summer’s 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’s via their website at 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, CPA, CIA, CFE, is a supervisor with EFP Rotenberg LLP, Certified Public Accountants and Business Consultants