Reports of short-term rental frauds and scams have continued, even increased, since we first ran this post, so here it is again with a few updates.
As short-term rentals and home exchanges have become more mainstream, reputable sites like Airbnb and VRBO have implemented a wide range of anti-fraud measures aimed at providing peace of mind for their customers. Still, wherever there is money to be made, con artists will attempt to worm their way in on the action. For example, renters will show up to the beautiful beach home they’d booked online only to find a family with no knowledge of the transaction already living there. It’s enough to ruin their vacation and set them back hundreds if not thousands of dollars. It also created a nightmare for homeowners like Pierre and Adrienne Alexandre who were stunned when strangers with suitcases showed up at their door in the summer of 2015.
Whenever you open your home to short-term tenants, you risk getting caught in a fraudster’s net. Fortunately, it doesn’t happen all that often – most short-term rental transactions are perfectly legit, and given the size of the short-term rental market, frauds and scams are relatively rare. But they do happen, so stay alert! Here are some tips to help avoid the fraudster’s net.
Be particularly wary when you use Craigslist
Craigslist can be a great and cost-effective (free) way to attract short-term tenants or find a short-term rental. But even though the vast majority of Craigslist inquiries come from reputable individuals with no intention of taking advantage of you, the site has no built-in anti-fraud measures to ensure a safe transaction or verify the user’s reputation, so you have to be extra careful. Have direct person-to-person conversations via phone or Skype with prospective tenants. Check them out on social media sites. Ask for documents to verify their identities. If they are reluctant to give you information or you spot inconsistencies, say, “Thanks, but no thanks,” and back away.
See Craigslist‘s suggested ways to avoid frauds and scams.
Accept checks or e-payments only for the agreed upon amount
A common scam involves a renter sending a check for more than the agreed upon fee and asking the host to refund the difference. By the time your bank notifies you that the initial check didn’t clear, the “tenant” has made off with the “refund,” and there is nothing you can do.
Be wary of overeager tenants
Would you rent a home from a stranger without asking any questions? Most people ask lots of them: is the place is big enough for their family? What are beds are like? How many flights of stairs are there? Is the kitchen is well-equipped? Are there shops and restaurants nearby? Are you right on the lake or will we need to walk? If prospective tenants are more interested in when you’ll be leaving town than in details about your home and area, or if they want to send a deposit “immediately,” stop and reconsider before saying, “Yes.”
Don’t give out too much personal information
People who ask for a copy of the deed to your house, a credit report, your bank account number for a wire transfer, and a copy of your driver’s license are probably more than overly cautious. Identity theft is a multi-billion dollar industry and thieves will go to all sorts of measures to get the information they need to rip you off.
Make sure the rent check clears before handing over the keys
Just because funds appear in your account doesn’t mean a check has actually cleared – the bank can reverse the deposit a week or more later if it turns out the check isn’t any good. If a tenant wants to pay by check, ask for the rent payment at least two weeks before arrival time.
Pay attention and trust your gut!
Fraudsters and scammers drop clues throughout a transaction. You might not notice them right away (we didn’t, when we almost got caught by a scammer seeking a temporary home for “a sick child.” But if you stay alert and trust your instincts, you can almost always pick them up. And remember: If it sounds too good to be true, it often is.
Have you ever gotten caught up in a short-term rental fraud or scam? Any more tips to avoid getting caught in a fraudster’s net? We’d like to hear from you!