Short-term rental fraud and how to avoid it
It is naive to think that in the field of short-term rentals, fraud does not exist. Each landlord who has had his apartment or house listed in the short-term rental market for over a year, will have undoubtedly faced this issue. For intermediaries such as Rafleys, short-term rental fraud is something that is encountered on a weekly basis.
When we first started operating at Rafleys, five years ago, it was a rare occurrence for us to come across fraud issues. However, the short-term rental market is growing, and parallel to it, are the problems and issues found within. There are more and more swindler-tourists who find a number of ways to have the initial costs of the rental decreased and their money returned to them, and at times there are even those who manage to leave without even paying a rental fee.
The most common method of fraud is through the request a refund for non-existent problems; this includes broken appliances, power outages, poor cleanliness and hygiene, stained, dirty or even insufficient linen, bad quality towels, a sudden and unexplained insect infestation, etc.
From our experience, this is what usually happens. A tourist arrives at his chosen rental location – everything at the property is in great condition and maintained to the highest of standards, allowing them to have a great break there. Nonetheless, the customer will without fail put up claims and complaints about the property to you in writing, and through the site where they made their booking (usually this happens through Airbnb or via booking.com).
They write for instance that the lights go out all the time, the next day they may say that the refrigerator is not working. You rush to send someone to turn the fridge on and fix the issue. It turns out however, that the customer accidentally pressed a button that turned the refrigerator off, but now, with a simple flick of a switch everything is fine – you have explained the situation to the customer; the incident you believe, is resolved… The next day however, it turns out that there is yet another issue – three lightbulbs in the bedroom and one lightbulb in the bathroom have stopped working, the guest can neither sleep nor make use of the bathroom. Once again you rush to fix the issue as quickly as possible and change the lightbulbs within hours. Nonetheless, complaints from the customer will be still be voiced and brought up on the website – each one individually. Every single time you still try to resolve the problem in a timely fashion and with the least inconvenience to the customer. However, during the tourists’ stay at the rental property, a few small issues that are resolved within a couple of hours of the initial complaint to you, the property manager, will still bring in 3-4 official yet unreasonable complaints.
After the guest’s departure, you receive a polite letter from customer support of the website, that your guest has already managed to get in touch with, seemingly without even having unpacked from their recent holiday. The letter states that your guest has asked for a refund for the days which he spent living in unbearable conditions with a damaged refrigerator and without functioning lights, with the letter being accompanied by a three-foot-long receipt for products that rotted in the refrigerator. Perplexedly, you reply that you had resolved the issued on the same day within a couple of hours, and that there weren’t any categorical failures as such. Based on correspondence held through the website, customer support chooses to side with the client, returning them the money for days spent at the property without a functioning refrigerator and without light, which customer support according to the client’s statement, counts as five out of seven days. As a result, you get paid for a total of two days, the rest is returned to the client. In spite of your dissent and indignation, customer support states that the correspondence with the client does not show that the problems had been resolved. You re-read the correspondence provided to you by the customer support team and alas, from the second day you come to see the daily complaints. You fixed everything that your guest brought up as an issue very quickly, but how can you prove it? In the end you end up without the money that you deserve and that more often than not is the sad ending of the story. The fraudsters have won! Alternatively, the customer requires a direct refund, threatening to post a negative review of your property and their stay on an online rental platform.
You are well aware that for websites like Airbnb and Booking, where you may have previously only had great 5-star reviews, one single bad review has the potential to ruin your small business and the upcoming holiday season.
You are frustrated by the great injustice you have been a victim of and decide not to fall for the tricks of fraudsters again and keep your hard-earned money, instead of losing it. You can’t help but think of the issue through the night and in the morning, you understand that it’s easier for you not to enter into a conflict with the fraudster and instead return the money, despite the fact that you are outraged and infuriated… As a result, the scammers win, and yet again you aren’t able to prove your righteousness.
At Rafleys, we come across a number of different types of fraud, so much so that one could write a whole book about it. However, being a company with extensive experience, we are not as vulnerable to such fraud as individual entrepreneurs, who rent their own property independently.
An individual, at some stage, will face fraudulent customers that will undoubtedly be a threat to the individual’s small private business. How could the owners of the rented-out properties protect themselves or understand how to recognize fraudsters before falling victim to their scams?
Here are some tips from Rafleys to help you avoid unpleasant situations with tricksters:
- Quickly recognize fraudsters. Strange requests, alarming complaints to very simple things that can be solved for example, by pressing a button, indicate that perhaps you are dealing with fraudsters.
- Respond to any complaints or queries through the website. ‘Is a gas stove dangerous to one’s health and safety?’ In response you may state that on the day of the customer’s arrival they were taught to use the appliance correctly and left instructions on the shelf. Having everything in writing will help you prove your case further down the line.
- Keep photographic evidence of everything that guests complain about and everything that is being or has been repaired. Does the air conditioner still work? If so, take a video of how it turns on and functions appropriately.
- If you have a gut feeling, even if it may not be completely justified, notify the website through which you have advertised your property, and warn customer support that the guests renting out your property do not seem to be very adequate people.
- If it comes to blackmail on behalf of the clients, try to have the guest give such threats or statements in a way that can be recorded and stored. If you have concrete, written evidence, a bad review can be deleted.
- Never engage in cash transactions. Allow for all the refund issues to be managed through the website. It often happens that the owner of a property will return the guest half of the rent money in cash due lack of hot water or a broken outlet, and the site, after a while, too will require “compensation” for the guest. The owner will pay twice, left with nothing except frustration and disappointment.
- Do not forget to leave a guest review after the customers’ stay and be frank. If you think you have encountered a similar problem, are full of doubts and are in need of advice, please get in touch! Sharing your experience and getting the right support will always lighten the soul. At Rafleys, we have encountered different kinds of problems and with a wide range of fraudsters. Since we’ve been operating and specialising in short-term rentals for over five years now and are advertised on more than fifty websites, we have extensive experience, including protection against fraud. We can now say that Rafleys wins almost all fraud disputes that it comes across. We could possibly help you find a way out of a deadlock.
You can write to email@example.com or call us at +34603906036. We will be more than happy to provide you with any help or advice, free of charge.