Holiday Rental Scam Shocks Letting Industry
The times is reporting that up to 100 families have lost an average of £3,000 after booking fake Spanish holiday villas through the website morairaway.com, which has now gone offline and whose owners are unreachable. There are concerns that exposure of this alleged rental scam will affect confidence in the holiday letting market at a time when tourist numbers are falling, or worse still, fraudsters will setup copycat holiday rental scams.
How did this happen?
It appears that morairaway.com placed villa adverts on leading holiday letting sites, including holidaylettings.co.uk and holiday-rentals.co.uk. These lettings sites refer enquiries to holiday home owners and agents who advertise on the sites. They do not take bookings themselves.
Following what seemed legitimate correspondence with staff at morairaway.com, unsuspecting families proceeded to book expensive villa holidays, the majority paying via bank transfer. Receipts, booking confirmations and key collection details were sent out. A process that is typical of holiday let owners, so nothing appeared unusual until the alleged scam was exposed.
Unfortunately, as many of the alleged victims paid by bank transfer they have little protection against such frauds. It is reported that many will lose the thousands paid for holidays.
What consumer protection do people have when booking holiday lets
There are concerns that the publicity of this alleged scam will affect confidence in the holiday rental market, but what protection do consumers have? As highlighted by this alleged fraud, very little when not paying by credit card or Pay pal. But a large proportion of holiday home owners only take payments via cheque or bank transfer.
Maybe it’s time for holiday rentals to be regulated or for an industry wide consumer protection scheme similar to ATOL and ABTA to be developed.
It should be noted that holiday-rentals.co.uk (homeaway) offers a holiday rental guarantee, which covers fraud up to £3,300 (or €4,000). Although the guarantee is free, you have to register bookings before you send payment. Flights, car hire etc. are not covered.
Responsibilities of the holiday rental sites
Although the holiday rental sites involved commented that they carry out a number of fraud prevention checks on advertisers, there is scope to improve these checks to prevent this happening again.
Suggested fraud prevention improvements to protect consumers:
- liaise with other rental portals or an industry regulator to share data on known scammers
- ask advertisers for copies of utility bills etc, as proof of ownership
- offer a credit card facility for advertisers to take payments from renters
- audit advertisements where availability calendars aren’t updated and there are high numbers of booking requests and enquiries
- provide rental guarantees for bookers
Show consumers looking to book your holiday let that they can trust you
Following the alleged morairaway.com scam, I expect holidaymakers will be more cautious when booking holiday homes. After all, what proof is there that your holiday let exists?
To overcome doubts consider providing signs of trust:
- show testimonials from past guests and get verified reviews on rental sites such as holiday-rentals.co.uk and flipkey
- make guests aware of the holiday-rentals.co.uk rental guarantee scheme
- provide your address on booking contracts
- take credit card or Pay pal payments
- be prepared to provide copies of utility bills to prove ownership
- if you advertise on holiday letting sites, your advertisement will usually show details of when you first advertised on that site. If you have been listed for some years, this is a sign that you are established
Hopefully the Spanish police investigation will catch the perpetrator of this alleged fraud, although I imagine this will be of little comfort to the unfortunate victims who are without a summer holiday.
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. Hopefully justice will catch up with the purpotrators.
How can this be prevented from happening again? Please add your comments below
Great post.
I looked into the protection offered by paypal but it seems like if you don’t make a claim before 45 days then it won’t be valid.
Thanks for pointing this out. This could be an issue as the peak booking season for summer holidays is usually January, some 5-6 months before holidays are taken. If a fraud was identified a few weeks before the holiday, several months after booking and paying, then there could be a problem reclaiming payments sent.
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