The cases of people being seriously disappointed by scams on the scale we’ve just seen are very rare and if booking directly with an owner, and you need reassurance, my advice would be

i) if you have found the property on one of the major listing sites, check the advertisement – usually at the end, there is a statement as to the date the advertiser began his subscription. If there had been several complaints received about the advertiser, the listing site would normally suspend his subscription; thus the longer the owner has been advertising on a site, the longer his good track record. So if the owner is new to the market, you may want to take your checks a bit further, such as

ii) seeing whether the person you are dealing with is the person he says he is – in my case, the booking form is visible on my personal website, and has my home address on it. Elsewhere, the contact email address and telephone number are given. Some owners prefer not to do this, so look on line for other references to the owner. (Google search eg.) Verify the ownership of the domain name and when it was first registered using tools such as WhoIs.com; check the ISP details within the emails you have received.

iii) looking on the owners’ website for renters’ feedback (relying solely on this is not recommended however) or the listing sites they use which perhaps publish reviews which can only be entered by genuine guests.

iv) better still if it’s on offer, is to check on the owner’s website for independent verification of the owner’s and property’s existence from one or more organizations and/or the local tourism or licensing board. Be sure you’re clicking on a live link however, as logos can be copied.

v) ask the advertiser if you can call to clarify some points. As well as giving you a feel for whom you’re dealing with, it tends to be a good way to pick up additional information about the property and the area!

vi) ready to book? Be sure that the owner supplies you with a booking contract for your reservation. This should set out all conditions of the holiday letting, including payment terms and methods, legal/insurance obligations and cancellation terms, and should be read carefully before you commit.

vii) never pay for accommodation by anonymous/untraceable methods. Be sure that you are paying the advertiser directly, or his established agent.

vii) finally, returning to what prompted Darren’s blog post, YHM is currently investigating the cost to the company for offering “supplier failure cover” although with our rigorous owner screening process, it’s highly unlikely that a claim would ever be necessitated: they complete a detailed application form, undergo interview before acceptance, and need to demonstrate that they are responsible, caring and professional towards their guests. YHM also takes references from at least three former guests, and refuses those owners who do not meet its demanding criteria.

viii) and, as Darren wisely says, “if something does not feel right, trust your gut instinct.”

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Hi Darren,

You raise some good points.

As mentioned it is difficult for owners to identify fake ads that are created by scammers. Unfortunately, at present it seems that the onus is on the holidaymaker to do background checks, which is far from ideal.

If an industry wide consumer protection scheme for holiday rental similar to ATOL and ABTA was developed then this would offer more safeguards from fraud. Paying by credit card also offers protection but I expect most holiday home owners do not have this facility due to costs.

My latest blog post offers further tips on how to check if an apartment or villa is genuine, which might be useful.

Hopefully the rental portals will act on the negative publicity surrounding these scams, which seem easy to set up, and offer more rental guarantees for all bookers.

Nice to see you blogging again.

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In my opinion it’s time that a joint bonding scheme was introduced, and consumers would then have the option of only booking with those companies serious enough to join such a scheme.

Are you referring to the listing sites or individual owners? I can’t see the smaller listing sites being able to afford a scheme such as ATOL/ABTA, only the giants such as Homeaway and Holidaylettings.

It would mean even less competition for rental home listing sites which is a bad thing as the big sites dominate too much already.

As an owner, I take bookings by credit cards which gives people who book automatic insurance cover for all transations over £100.

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In Ontario, all rental agencies must be registered as travel agents and comply with the Ontario Travel Act, which gives consumers protection against such issues as the Morairaway incident raised.

Agencies must hold payment in a trust account However, agencies still operate without registration and the Travel Industry Council of Ontario which regulates the Act, are slow to seek compliance.

Jane makes some great points with regard to checking owners credentials when renting privately too.

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I too would love to be in a position to take credit card payments for our three gites and campsite pitches here in France. But, the charges are fairly hefty to do so. PayPal isn’t an option for us either for similar reasons. Nor do I think it’s an option for many of our guests as it’s not a popular method of choice for paying for holidays.

To be fair, we’ve never had the problem of folks being uneasy about booking with us as we’ve a pretty good web prescence for one, built up over the past 4 years. We’re completely above board with who we are and where we are. We’re searchable on Google with many reviews out there which stand as testament that we are who we say we are. As you say Darren, I think this is far from endemic within our industry, but agree that it should be looked into.

Like Susan, I’m also very sceptical that the smaller ’boutique’ listings websites, such as YHM would be able to fund the type of consumer protection that Jane Bennett speaks of.

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If a bonded scheme existed for rental home owners, I’d be happy to join it. I’d much rather do that than be forced to sign up with the very expensive Homeaway huge listing sites who offer protection (but unfortunately no enquiries). I agree that there needs to be more protection for consumers.

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As an owner, I offer payment by card via Paypal, charges prevent me offering anything else. Paypal is expensive too, but I factored in the charges when I started to rent. I admit as a renter to being uneasy in the past about sending cheques for payment to unknown people, which was why I decided to offer this.

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Hello Darren.

I completely agree with Jane Bennett. This is a rare case, but nevertheless it is a poignant reminder that we all must be vigilant, as business owners and as holidaymakers, particularly given the traditional method of booking holiday properties directly with their owners.

Financial protection such as supplier failure insurance and Section 74 of the consumer credit act (for credit card payments) offer some financial protection, however there are basic checks and guidelines, many of which Jane has mentioned which are well worth considering.

Unfortunately, as a result of the low barriers to entry, its relatively simple to create a fairly professional looking website, with the aim of defrauding customers, and given the feedback from HolidayLettings it does appears that this was an exceptional case and a very sophisticated fraud.

Another concern I have comes back to rental listing websites publicly offering free listings.

From the start we, as an organisation, have been committed to security and have developed a strict procedure for verifying the validity of our advertisers. This process is also extended to protecting our advertising from email spam, however all things aside I would welcome a roundtable with fellow members of both the travel and holiday rental industries to collaborate on perhaps a UK or even world wide set of standards in order to restore any confidence lost since this scam was brought to light.

Simon

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A trust of ‘rental sites’ could offer reassurance but outright protection, I doubt it. There are just too many sites out there and to be fair owners are their own worst enemy. The comment above about the big guys being too dominant. This is evident by the volume of listing these sites get and yet owners keep flocking to them despite increased competition within their own areas on the site.

It is also of note that it is precisely the big sites which have facilitated the fraud in the first place. I own a small new rental site. We pride ourselves on providing a quality service, not only to customers but also to owners. We afford them the ability to take credit card payments and to offer protection to their customers through this.

I think regulation is a long way off, you can regulate here in the Uk but that wouldn’t have stopped Morairaway listing on Holidaylettings and holidayrentals from Spain. Their site was also registered in the US. Who regulates this, the Spanish, Brits or Americans? And when its breached who prosecutes/disciplines? And how do we regulate the sites that are hosted in Asia? It’s an impossible task and will add another layer of barrier to trade to British sites who won’t be able to then compete on price with the foreign listed sites.

Responsibility for booking lays at the door of the owner AND consumer. Caveat emptor. When you pick up the phone and try to save 2% booking charges with a credit card you are leaving yourself wide open. The first rule is, if the owner can’t facilitate a credit card payment don’t book it.

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@Susan. Protection does not have to be expensive; someone like the TTA (The Travel Trust Ass.) can help at lower prices. Also they can save you money on things like credit card charges.

@Darren. A simple way to check is see if the company has a VAT number. You’re also seeing a lot of court cases against people who are setting up fake holiday companies and disappearing with money. Ask yourself why this company is cheaper than anyone else, with margins of 1% there is not much room for discounting.

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@Andy. Don’t agree with your parting shot at all. I personally wouldn’t trust a third party to take my payments for me and pass on the difference as & when they felt like it after deducting their cut. (While having considerable cash left gathering interest in their own account). There are myriad reasons why some owners don’t take credit cards, not all of these reasons are dodgy, as you imply. We work bloody hard to earn our living, whilst most listings sites trade on that hard work for very little input. Possibly a reason why 95% of our own guests here choose to book direct with us, and pay by cheque with no questions asked. And why we’ve seen a noticeable decline in enquiries through ‘reputable’ listings sites such as Homelidays, Owners Abroad, HolidayLets.net et al!

In four years of trading, and having upwards of 1000 guests in that time pass through our doors, I have not one e-mail, letter or comment in any of the visitor’s books that makes a reference to any concerns that we were ‘for real’. There are (as I’ve already stated) so many checks that can be made (in France, check the Siret number too…) to ensure that you’re booking is a genuine one.

It’s about time we as owners of quality holidayhomes, working hard to satisfy everyone who trusts us, were given a little credit, rather than having people tar us all with the same very broad brush.

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Stu,

Sorry if I have touched a nerve here but the facts are everyone who has either read the times, read a blog, or listened to radio4 will now be very very wary of booking. I also cannot see why anyone would comment about being worried about paying with a cheque when they have actually arrived and are sitting in the villa. Of course it is not a worry.

I can also tell you that being a new listing site myself and the staff work extremely long hours for little reward. You seem to mply it is easy to set up a site and then count the cash through doing little else. How I wish this was so.

The cold hard facts are through unscrupulous individuals the honest individuals like you and I are going to suffer. People will be wary, and at a time when people are guarded with the cash in any case. We all have to work that little bit harder to ensure people can trust us. I just think the easiest way to do this is to facilitate CC payments. S75 of the consumer credit act 1974 then ensures the customer is covered. It is highly unlikely a business will allow this because they know they won’t get paid and will be charged back if there is a problem. Additionally it isn’t easy getting a merchant account with the checks that they do in the first place.

I can assure you we makr very little from the CC commission. Less than 1% in fact and we do not top up our commission to facilitate this if an owner finds the customer themselves. That is not expensive at all and I cannot understand why owners are so against it. The benefits outweigh the pitfalls.

Regards

Andy

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Darren,

point taken. So why are you talking about airlines? And does not ATOL cover that? The whole point of this is if people pay with a card they have access to get their money back. I think that booking a flight direct with an airline is much much safer because it is clearly evident they actually exist as opposed to a villa that may not even be there.

God! you’ve got me ranting now!

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I don’t think this is widespread issue, as following the publicity surrounding this case only a few other similar scams came to light.

Listing sites do have a responsibility to protect consumers. Although homeaway seem to be refunding 50% of the loss suffered by people who did not register for their guarantee, consumers clearly need more protection.

It will be interesting to see if any holiday rental protection schemes are developed in the future.

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Just an update:

Timesonline has reported that Thames Valley Police have now completed an assessment of the Morairaway.com case and will lead the investigation in the UK.

They are appealing for victims to make statements, which is positive news for the victims.

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I had paid a deposit by bacs transfer from my bank to a Barclays bank account in Portugal. This villa owner advertisment was on Owners Direct website in October 2009. The owner rang me several times last year, and I felt confident all was well, as after all the website was as good a rental site as you can get???

The balance was due this week, but I have been unable to contact the owner. Owners direct now tell me that they withdrew the villa from their website in November 2009 for non payment of subscriptions. I wish I had known this! So I have lost £890!!

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@M Town

“The balance was due this week, but I have been unable to contact the owner. Owners direct now tell me that they withdrew the villa from their website in November 2009 for non payment of subscriptions. I wish I had known this! So I have lost £890!! ”

There’s a world of difference between Owners Direct pulling the villa from their site for non payment of their (expensive) subscriptions, and you being stung by a scam. There could be a very good reason for your not being able to get in touch with the owner. He/she may well be having a holiday themselves. You don’t say how long they’ve been unobtainable. Give them time to reply? Have you tried their ‘phone as well as e-mail?

Had you taken out an adequate insurance to cover you for this kind of eventuality? If not, why not?

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Mr (or is it Mrs) Town, I am very sorry to hear of this and do hope that you haven’t been stung. With all the scams that are around on the net, both for consumers and companies, it still surprises me that people are prepared to transfer cash and/or send cheques to people, frequently in foreign countries.
Just this week we have been asked to debit credit cards, details sent to us by individuals that are willing to let us take what we want from the card. Clearly a scam (and not a very good one) where they then ask for a refund on the card to a bank account. Then, low and behold, the card is recharged because it is stolen and we end up out of pocket.
What is the point of this little story? Just to point out that it isn’t only individuals that are scammed and with the internet you need to check and double check.
I still strongly support the view that S75 of the Consumer Credit Act 1974 is fundamental protection and if you want further guidance read this from Martin Lewis.
http://www.moneysavingexpert.com/shopping/section75-protect-your-purchases

Always, Always, Always pay with a credit card when booking property abroad. There is so many villas to choose from that not doing so is a risk not worth taking.

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Andy. No. It is NOT always necessary to pay by credit card. There are many, many owners out there that are honest, hard working ane eager to please you as a holidaymaker. But, they’re often far too small an enterprise to accept payment by credit card. we know. we’re just such an enterprise.

Thankfully, because of our presence on the ‘net over the past five years of trading, we have a solid reputation. We’ve never had any questions raised as to our authenticity. There are myriad ways to verify an owner’s genuine before you part with your cash. Everyone knows about the ‘Nigerian’ scams, and these days it’s only a fool that falls for it.

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