the Deal

How to Avoid an Online Vacation Rental Scam

By Jason Alderman

Imagine renting a home on a beautiful beachfront from a trusted website, arriving to start your vacation and finding out you’ve been scammed?

This scenario reflects thousands of complaints placed with the U.S. Federal Trade Commission (FTC) last year involving local vacation rentals. The FTC reports some victims lost money by wiring cash to thieves posing as property owners. Others lost money through fake websites replicating legitimate sites.

In today’s economy in which home sharing has become more popular, how do travelers protect themselves from a range of potential online scams? Here are some suggestions:

Review rental contracts carefully. Check the address of the property you’re interested in with on-the-ground resources like the local tourism office or the leading real estate brokerage in the community. While you’re speaking with the tourism office, ask if there have been any specific complaints against the rental service you have consulted or if there might be more reliable and possibly more affordable rental resources in town.

Be wary of your source. Legitimate property owners may use free print or web classified ads to save money, but it’s important to vet any free listing very carefully. Also, confirm with a live representative to ensure the site is legitimate.

Compare rental rates in the immediate area. A good deal might be tempting to seize immediately, but the FTC notes that severely below-market pricing for rentals and other vacation services in a community might indicate a scam. Crosscheck the pricing of home rentals and related services in the community before you make a reservation. Given the example above, don’t rely on the Internet alone. Pick up the phone and talk directly to a representative.

Check transient license law in your destination city. Transient licenses regulate properties rented to guests for time periods generally 30 days or less. Call your destination city to get details on their transient license law and whether you can confirm the registration of the property you’re considering. Ask the property owner for a copy of his or her transient license and see if the city will share the same license for your inspection to make sure they match. Also ask the city whether any specific complaints are available for the property you are considering.

Be wary of phishing scams. Be on the lookout for email and phone scammers who masquerade as employees of businesses you trust – they’re after your bank or credit information. If you receive emails or phone calls demanding advance payments, contact the original website to confirm your reservation and payment policy. Recently, travel site Booking.com had to pay out compensation to more than 10,000 customers from the U.S., UK, France, Italy, Portugal, and the UAE who were victims of a phishing scam.

Follow recommendations. Personal recommendations from friends and family can ensure a safe transaction. If you know someone who has visited a destination or rented property recently, ask which companies or individuals they would recommend.

Report fraud. Inform the local police at your vacation destination, the local Better Business Bureau, and the FTC. When you get home, notify your local police or your state attorney general’s consumer protection office to alert them to this particular cybercrime if you made the money transfer from your home state.

Bottom line: As online vacation rentals grow, so does cybercrime. Be cautious when booking arrangements online to protect your payments data.

Jason Alderman directs Visa’s financial education programs. To Follow Jason Alderman on Twitter: www.twitter.com/PracticalMoney.