Case dismissed: The “carefree” rental guarantee didn’t cover her

Amy Hutt is no beginner when it comes to the vacation rental game. She’s booked several homes through, a site owned by HomeAway, in the past, and she felt confident about turning to it for a trip to Bali this fall.

But this time, she lost.

At first, the rental in Rumah Cinta seemed routine. The reviews were all positive. The property contact responded promptly and acted professionally.

“The person corresponding with me signed her emails as the owner,” she says. “I didn’t think anything was amiss.”

Then came the first red flag: The owner insisted that she wire the money for the rental.

I protested, but she said that because I was coming in less than four weeks, this was at “their convenience”.

The bank details that she sent me included the name “Ketut” which is the name of someone listed on the site that watches over the property.

With trepidation I transferred the full amount from my bank to theirs.

Then came the second red flag. She heard nothing from the property owner.

It didn’t take long for Hutt to conclude she’d been scammed.

Fortunately, she’d purchased VRBO’s heavily-advertised Carefree Rental Protection policy, which she was certain would protect her against this fraudulent rental.

Had she read the agreement carefully, she would have seen yet another flag. But VRBO was good enough to explain it to her.

Internet Fraud is defined as a deposit or payment by a Registered Traveler for a vacation rental that is listed on a HomeAway Site where such listing is subsequently determined to be, in HomeAway’s reasonable discretion, fictitious or illegitimate in that the vacation rental property (i) does not exist, or (ii) was advertised by the advertiser with the intention of defrauding travelers and with the general aim of making the victim believe in the existence of a non-existent rental property.”

Additionally, Section 3 of those same Terms and Conditions of the Carefree Rental Guarantee from HomeAway provides specific examples of items that are not protected by the program:

“Any loss of funds that is caused by the takeover or “phish” of a property owner’s or manager’s email account or the property owner’s or manager’s account on a HomeAway site.”

I didn’t quite understand why Hutt wasn’t protected, so I asked VRBO for clarification. If I’d paid an extra $40 for a policy that didn’t work, I’d be unhappy about this rejection.

A VRBO representative explained that she’d been the victim of what’s called a “secondary” phish — that is, the property owner’s email account had been hacked. After breaking into the owner’s personal email account, the scam artist communicated with Hutt and diverted her payments into his bank account.

There’s no way VRBO could have known or prevented that kind of breach.

But why isn’t this covered?

“The Carefree Guarantee covers things we can control or influence,” a VRBO representative explained. “For example, we control who is listed on our websites and remove advertisers who consistently provide poor service or bad experiences. We take responsibility under the Carefree Guarantee when a traveler is confronted with property that is not as described, does not exist, or when unforeseen circumstances cause the property to be unavailable and the traveler is denied entry upon arrival.”

Moral of the story: Never wire money when purchasing something over the Internet. Ever. (But you already knew that.)

And when anyone offers a product with the word “carefree” in it, be worried.

Be very worried.

Update: Turns out this case had a “happy” ending after all. After I wrote this story, I received a note from Kemp.

I wanted to let you know how my case got resolved because I believe your interest may have gotten them moving.

The real owner of the property in Bali just surfaced this week. She had no knowledge that this had happened to me.

VRBO “encouraged” her to make good by allowing me to stay in the property and she agreed.

She felt ripped off too since this was forgone rental income for her. However, she’s been really gracious with me and understands how bad I got scammed.

She still believes that the security breach is tied to VRBO and not her Gmail account.

I think she might be right. Check out this recent post on TripAdvisor from an owner. EXACTLY what happened to me.

VRBO needs to get aggressive with this. They have the corporate means to track this thief down.

(Photo: Marm ontel/Flickr)

Christopher Elliott

Christopher Elliott is an author, journalist and consumer advocate. You can read more about him on his personal website or check out his adventures on his family adventure travel site. Contact him at

  • Raven_Altosk

    Using a web based email to transact business is never a great idea. (The property owner was using gmail and supposedly got hacked)

    Also, this HomeAway or whatever they are called needs to pay more attention to where it’s listings are coming from. Did it record the IP address from where the fake listing was posted? Was it local to the rental property or half way around the world? Do they require a follow up phone call to the person listing the property to validate it? Why are these extra steps not being used as a precaution?

    It’s a sad state off affairs when they know this problem exists, they do not warn about it prominently on their website, and have a guarantee that is worthless.

    Personally, I wouldn’t shop for a vacation home like this. The site is basically craigslist without the adult ads.

  • $16635417

    So someone lists a property on VRBO. The traveler sees it, contacts the “owner”, wires the money and hopes for the best? You notice a couple red flags yet continue anyway? You get scammed and VRBO “suggests” the owner give you a free stay?

    Now please explain why I would want to either book a property or list my property on this website? Am I missing something? I’ll stick with Priceline and Hotwire! ;)

  • $16635417

    Craigslist got rid of their adult section quite some time ago. Yes, some still may get slipped into another category, but CL relies on users to flag them for removal. Still a far cry from where it was.

    But I still like the analogy.

  • Judith

    Does anyone know any other websites like this that offer ‘stupidity insurance’? I know plenty of people who should buy it…

    Really, anyone who uses an international wire transfer to a stranger is just asking for trouble.

  • BillC

    At first glance it appears that she did not follow the payment method as describd on the website so I don’t think that the site can be held responsible. People usually try to look professional when attempting to scam you through email.

    Sometime trying to save money can be expensive.

  • Tony A.

    I love this – stupidity insurance! I wonder what they teach (or don’t teach) in school these days?

  • Jeanne_in_NE

    Chris, the formatting is a little off, so I don’t know who is speaking which words, you or Ms. Hutt.  Particularly, the last paragraph.  Is it you or Ms. Hutt suggesting that Home Away has the corporate means to find the phisher?  Not being conversant in the world of phisher tracking, I’m not sure what “corporate means” would be employed.

    I do see that Home Away is very much aware of phishing schemes – see from 2009 as an example, citing phishing schemes perpetrated against owners.  That’s probably why phishing losses are excluded losses for insurance.  But citing a post on TripAdvisor showing that renters have been scammed doesn’t mean that Home Away is perpetrating or colluding in the scam, just that the thieves are just smarter than the victims.

  • cjr001

    What does web-based e-mail have to do with it? Any e-mail account can be hacked, as e-mail generally isn’t all that secure in the first place.

  • A professional business shouldn’t have a GMail account that is, often, too easily hacked.  The OP should have been savvy enough to wire money overseas where our laws don’t apply.

    I can understand needing, wanting, taking a vacation and if someone’s going to get scammed, that’s when it’s most likely going to happen.

  • Oops. Sorry about that. Formatting is fixed.

  • Fishplate

    I understood it to be a real listing.  Since the OP stayed there, it must be legitimate.

    The breach occurred with the lister, who may have lost control of thier email account – something VRBO/HomeAway has no control over.

  • Mbods2002

    Oh boy…I’ve used HomeAway several times with no problems.  Will I use any of these sites again?  No way.

  • Mark K

    How are payments normally made?  It appears that you pay VRBO and they forward the payment to the owner.  So why, if the OP had done this before, would she fall for this scam? The VRBO guarantee specifically states that any electronic funds transfers of any type directly to the property owners are not covered.  The OP should have insisted on paying the through normal route.  If the “renter” would have continued to insist on the wire, she should have moved on after reporting this to VRBO.  

    The excuse that it was so close to the rental date doesn’t seem right to me anyway.  If it was close and the property had not yet been rented, the owner should have been happy that some one chose the property.  And finally the owner just let the OP stay out of the goodness of her heart?  Something really doesn’t sound right about this.  Either VRBO is paying something to the owner to protect their name or the owner knows who did this and can recover the funds.  While I would be regretful this happened, if it was my property I would not be so generous unless I was getting something.

  • Mark K

    The owners of the properties are not professional businesses.  They are people hoping to make a few bucks off their vacation homes while they are not using them and VRBO offers the service to connect them with prospective renters.  I would guess many of the owners listing their properties have a separate email account just for the renters to contact them through.

    VRBO is a professional company and has an email account as expected of a real company.

    I agree that the OP should never have wired money, especially since it is stated she had used VRBO before many times.

  • Mark K

    I would not refuse to use them ever again, I would just be certain I followed the posted rules and procedures and just be wary of owners that don’t seem to want to do the same.

  • Blake

    I would say always pay with a credit card,,, but this has some problems and costs … Even if the hotel or travel agents takes credit cards sometimes there are extra fees involved up to 5%.. so be prepared to pay this extra.. Its probably worth it.

  • Brooklyn

    I’ve stayed in this kind of place a number of times, but I’ve always paid the umbrella company with a credit card.  It’s not just about saving money; for me, it’s about staying in a real apartment, not a hotel, in a real neighborhood.  The owner often leaves information on favorite local restaurants and friendly cafes and is available to answer questions.  When it works, it’s heaven! But I do think that since VRBO takes a portion of the fee for every rental, it has some legal responsibility even without the useless insurance policy. If the property owner knew that her e-mail address had been hacked, then some or all of the responsibility lies with her as well since she didn’t post a warning on her listing.

  • RobynJacqueline

    Why on earth would she wire money to anyone? And shouldn’t the transaction of any payment be handled directly through so that they can track exactly where the money is going to prevent this sort of thing?

  • Abhi

    It was quite possible for the OP to contact VRBO before making the wire transfer. A simple email asking for verification/assistance could have easily put the onus on VRBO to verify and vouch for the authenticity of the owner’s interactions with VRBO customers. If they had said they couldn’t do it, it’s quite obvious that they are not as reliable as they show off to be. That would be sign enough to go somewhere else to look for the booking. 

  • Michael K

    The problem I have with VRBO’s justification for their original rejection is that they are not in a position to judge whether the property owner is a victim or is colluding with the phisher.  (That’s before we even get to the possibility that the scammer may have exploited a VRBO security hole).

    The “happy ending update” clearly demonstrates that in this particular case the property owner was indeed a victim, and they should be applauded for how they handled it.

  • bc

    WOW, that’s one gracious property owner!

    I had something similar happen to me a couple years ago when I was looking for a vacation rental in London. I found a reputable company (found many positive reviews and called and spoke with agents in the NY office) that had privately owned properties listed online.
    When it came down to the rental all of a sudden the property owner was “out of the country in Nigeria and I needed to wire the full sum to secure the property”.

    I spoke with the representative at the company that hosted the rentals to raise my concerns and they said “oh no, this sounds very reasonable to me” …I think all they cared about was getting their fee and they offered zero protection.

    That is where I backed off. NEVER EVER wire money to anyone you don’t know personally. PERIOD

  • $16635417

    Nigeria! Is it a prince? I have been conversing with him as well. I am just about to give him my bank account details to assist him in getting a large amount of HIS money out of the country….for which I’ll get a percentage. I’m sure it will go OK. If not, I’ll contact Chris and we’ll get someone else to reimburse me. :)

  • bc

    Blake I wholeheartedly agree. I recently booked a trip to Peru with a company online and they asked for a wire transfer or add 3% to pay by CC. The $150 it cost to pay by CC was well worth it to know I have a chance to get my money back should something go wrong.

  • Alaskan traveler

    I used VRBO to find a condo rental in Oahu last winter. You inquire about the property, and the owner or manager gets in touch with you. In my case, the property I was interested in was not available, but the owner put me in touch with a real estate company that oversees rental properties for a number of owners in the condo complex. We reserved our room with a credit card deposit. The entire transaction went smoothly, the condo was great, right on the ocean–we got everything we hoped for, at the price agreed upon. I’d definitely use VRBO again. The request for a wire transfer was the red flag; as was said before, we all know that legitimate businesses don’t ask for wire transfers. VRBO is basically a brokering website, and probably gets some small percentage of successful rentals initiated through their site. Renters are put directly into contact with owners, so I don’t see how VRBO could be responsible for an owner’s email being hacked.

  • Martin

    VRBO isn’t really apples to apples with Priceline and Hotwire.  They’re exclusively condos and houses and since you’re renting individual properties you tend to know pretty much exactly what you’re getting. If a great view is a must, there will be photos showing you the exact view–no worrying your hotel room will overlook the parking lot or have some other obstruction. You can see how the place is decorated, the layout, if things have been recently updated, etc. You’re not going to get that from normal lodging sites.

  • Chris

    I have rented through VRBO at least a dozen times and have never had a problem.  But, then I have never traveled out of the continental USA.  I’m sorry to hear about this problem with VRBO because just this week I’ve been looking at their property listings in Paris and now have second thoughts about even beginning the process.

  • Janice

    Stay with Priceline and Hotwire?  Chris has never had any stories about those websites.

  • Grant

    Whaaat?  VRBO “encouraged” the property owner to allow Ms. Hutt to stay for free?  And the property owner agreed to that?!  Oh yeah. That passes MY ‘smell’ test.  :-)      

  • S E Tammela

    By the way, the name “Ketut” means “fourth” (child), or eighth child. It is normal that a Balinese family name their fourth child Ketut, so the name is more common in Bali than John is in the USA. If you ever need to deal with a Ketut, don’t assume it’s the same scammer.

  • $16635417

    My point is…with all the complaints Chris has from people using Hotwire and PL, I’ll feel better using THOSE sites than this one.

  • Raven_Altosk

    Agreed that legit businesses don’t ask for wire transfers, or at least none that I want to do business with do! A travel agent that Conde Nast recommends as one of their “Gold List” TAs wanted a wire transfer from me last year when I was looking to book a dive tour in Belize.

    I told her I didn’t do wire transfers, and she wouldn’t take a credit card, so she lost a commission on a pretty pricey itinerary. What is disheartening is that CNT still has her on their “Specialists” list for Belize.

  • acproductions

    You must not read this column on a regular basis.  There have been several incidents over the last couple of months.

  • Jimmi

    You must never have heard of sarcasm, have you?

  • Guest

    I believe it’s illegal for a company to charge a fee if you use a credit card.  Was the trip to Peru with a U.S. tour operator?

  • Guest

    VBRO is just sleazy.

  • Mark K

    Not illegal, just against the CC regulations.  A card acceptor merchant can offer a cash discount but not call it a fee if they charge more to accept a credit card.

  • Mark K

    I don’t have issues with wires as long as the company is legitimate.  The travel company I deal with accepts wires, personal checks from US banks, or credit cards.  You get a small discount for not using a credit card.  I see nothing wrong with wiring to this company even though I have not had to do it so far (I pay by check).

    Given some of the stories reported here where the credit card company refused to take the side of the customer and sided with the merchant makes me feel no matter which route the money goes you don’t have much chance of recovering it unless the merchant wants to refund it to you. 

  • MikeZ

    That’s why I am concerned. If you are renting a property, wouldn’t you be checking your e-mail more than once every great while? As soon as I even think I may have a problem, my password gets changed. Seems like the property owner doesn’t check e-mail all that much and really isn’t internet savvy.

    And yes, there should be some responsibility with the owner as they were the ones who had a password that was easy to crack.

  • andermatt

    The first nail is in the coffin for VRBO and Homeaway. They are clearly and knowingly providing and promoting a flawed insurance policy and taking extra money from customers while providing no benefit. The customer may have been scammed by the Internet fraud, but they were scammed again by homeaway and vrbo. Good idea run by bad people. My hope is the better business bureau will be knocking soon. 

  • HH

     So this is typical with Homeaway and VRBO. Homeaway is a horrible company with terrible customer service. I suggest if you own a property, list w a local company where you will receive individual attention and personal service. If you are looking for a rental, look for a local listing. I’ve been on both sides of this scenario and I absolutely hate homeaway. They really don’t do anything but wait for your money to come in.

  • Giacomo Fiorin

    Homeaway’s insurance is only a ploy.

    I booked a country house last summer that supposedly slept 8, but only 6 were inside the building: one double bed was in a tool shack, separate from the building. None of us slept there, the owner did not return our deposit, and instead fraudulently edited the property’s description after my complaints to add “semi-detached”.

    After submitting full (and notarized) documentation to HomeAway:
    1) They saw “semi-detached” as an accurate description, even though I had provided pictures showing the tool shack 10ft away from the building, without shared walls.
    2) They admitted that they could not verify whether or not the owner had edited the listing, because of “limited storage capacity”, and did not consider my printed version of the webpage.
    3) They canceled the insurance, refunding the subscription fee, with a letter saying that the policy “never was in effect”.

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