How to prevent website fraud in the vacation rental industry

Katya Kachkovska 6 May 2022

Running a legitimate business with an online presence can be a daunting process. Especially when you wake up to the news of the next website scam. Yet, in today’s climate, can you really afford to be put off?

Every day, travelers are flocking to the next best holiday deal. Whether that’s through booking direct on the host’s own website, booking last minute, or even planning ahead: where there’s a deal, there’s a buyer, which is all the more reason for every hospitality provider to be fulfilling the potential of building their online presence.

However, where there’s a transaction, there’s potential for fraud, and the vacation rental industry is no exception. The impact can be devastating.

How do we as an industry combat website fraud, minimize the impact, and build trust and confidence for both hosts, operators, and guests in the vacation rental industry?

To help dissect the forms of website fraud, we’ve interviewed Chené Koscielny, Content Specialist for Lodgify. Through the right practices, solutions, and knowledge of those red flags, the measure of risk for fraud can be reduced, helping you run your business with a safer and more authoritative online presence.

What is website fraud?

“It’s important to note that as the industry grows our vulnerabilities do too. It’s no surprise that vacation rental chargebacks are on the rise, so it is vital that hosts and guests know how to protect themselves online. Two of the most common cybercrimes plaguing the industry are imitation websites and the notorious phishing scam.”

Website fraud is exactly that – a scam that deceives users into fraud through an illegitimate internet website. The anonymity of such a vast tool is exploited through various methods mentioned by Chené.

What is an imitation website?

In the vacation rental industry, a scammer will take a real property that is listed on an online travel agency (OTA) and will copy the information to create a fake website and listing to manipulate and mislead potential guests into handing over their money for a property the scammer doesn’t own or manage.

This is just one example. Other fraudsters have gone to the lengths of creating whole websites and listings that simply do not exist. They offer better than average rates for quicker conversions where the payment is made before the scam is discovered.

What is phishing?

Phishing is a popular online attack among fraudsters where false situations lure users into disclosing personal information, such as passwords and banking details.

Legitimate vacation rental hosts can have their data phished via emails, telephone and text messages by scammers posing as potential guests. Slick cybercriminals can then intercept a vacation rental host’s inquiries and in extreme circumstances their guests’ payments.

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How are hosts and guests exploited?

“An unsuspecting guest stumbling across a fake listing or imitation website for a vacation rental may try to book the ‘rental’ and pay for it, only to discover the rental does not exist or doesn’t belong to the person who claimed to be the owner. By then, they usually don’t have much hope of getting their money back”

Similarly to guests, hosts and property managers are also exploited by fraudulent websites.

Exploitation is not always through a loss of funds. In fact, it can detrimentally impact businesses in many other ways. This can be through physical and mental attributes:

The credibility of your business
Lack of trust (from potential guests)
Self-esteem
Trust and faith in the industry

Trust plays a huge factor in the vacation rental industry. It’s a transaction between strangers: a host and a guest. So, the presence of just one scam in the industry can negatively impact and tarnish the whole sector.

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How do you identify a fake vacation rental website?

“Remember, if the website or listing appears to be ‘too good to be true’ – in other words, the price is completely out of kilter with similar properties in the same area and at the same time, or the facilities seem to be too luxurious for the price – then it most likely could be a scam.”

Here’s what to look out for when assessing whether a website/listing is legitimate or the next big scam.

Check the email address! Verify that the same email address is being used across the internet whenever you see that specific property listed or website named. If different email addresses are being used, it could be a scam.

Check reviews! Fake-sounding reviews or a total absence of reviews on websites or channels is another red flag. Be sure to check reviews on various websites and to read the negative ones, as they will alert you if there is something dodgy about a rental.

Check for a secure payment channel! If the website or listing is requiring upfront payment in full or a down payment in cash, wire or via debit card, you are likely to be scammed. Payment by credit card through a secure payment channel, such as an SSL-certified website, is the safest way. Check out the importance of 3D secure payments for vacation rentals.
Check if you’re protected! If the rental host is not requiring a short-term rental agreement, this means neither party will be protected if something goes wrong and most hosts require you to sign an agreement as part of the booking process. This can be through host protection guarantees with third parties such as Truvi.

What’s best: direct booking websites or OTA listing sites in terms of fraud?

“The risk is even greater for those listing on OTAs and aggregator sites than for hosts with their own websites. Why? Think about it for a second. All it takes is for one booking site to fall victim to a phishing scam and hundreds of thousands of properties and their reservations could be in danger.”

With that being said, OTAs are implementing measures to protect themselves and their users with the rise of fraudulent activity in the industry.

Here’s how you can reduce the risk of falling victim to a website scam:

Keep your login details safe. Do NOT share these with anyone.

Set up a personal notification for each booking to include a phone number or email to enable guest verification.

Professionalize your website. Ensure it is fully functioning as this builds your credibility as a vacation rental owner.

Having a vacation rental privacy policy for your website is another important aspect of website safety. It tells your website visitors how you plan to use, distribute and store their data. You should also ensure your website conforms to privacy laws for the country in which you conduct your business, for example, GDPR in the EU or CCPA compliance for California.

Create an ‘about’ page. By sharing your business’s story, you’re helping build the authority of your brand. People trust people. Avoid being anonymous.

Social proof and reviews help legitimize your website/listing and also build trust between you and the guest.

Remember, no website can be 100% free from potential cybercrime. All the steps above are to help vacation rental owners take every precaution to help minimize the risk of becoming potential fraud victims.