The VRBO scammers strike again! But can I help?

By | September 28th, 2015

When I read Grace Lou’s email, I couldn’t believe it.

I thought this problem had already been fixed. I believed I would never see another case like this again. But there it was, staring me in the face.

Lou says she’d lost $13,850 to a VRBO phishing scam.

Lou tried to resolve this with VRBO, but hit a dead end. She wants me to help her pursue this with UK banking regulators, which for me is uncharted territory. I’m willing to try, but I could use some help from you.

Let’s go straight to the tape, which I’ve edited for the sake of brevity.

Lou: I am interested in your home in Aspen. We are a group of three families, with 12 adults and two children. Thank you for the information in advance.

Bogus owner: As you know, the price per night for the selected property is of USD1,550. There is an additional deposit of USD3,000, which will be 100 percent refundable in maximum 48 hours after the check-out.

So, if you decide to rent it for the 7 nights, you will have to pay USD13,850 (with USD3,000 being refundable).

About the payment now. Like every other HomeAway.co.uk transaction, the payment will be made in full in advance. The money will stay into one of HomeAway.co.uk safety accounts. The funds will be released to the property’s owners only after you will confirm the check-in on the December 19th, 2015. While the amount exceeds USD10,000, we will not be able to use credit/debit card as payment option. In order to avoid mixed bookings or even duplicate payment requests, please do not attempt to make any other booking requests. From here we will arrange everything for you, so you can benefit from a quick and safe reservation process.

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Lou: Attached you will find the contract signed and a copy from the bank for the wire transfer from First Reliance. They said because it is an international wire transfer, the funds could take up to three days to be received.

Bogus owner: Thank you for confirming the payment. As soon as our bank will confirm it as well, we will send you the booking approval.


What follows is a series of heartbreaking emails. Lou doesn’t hear back from the bogus owners, of course, so she tries to stop payment on the wire transfer. That doesn’t work. She tries to contact VRBO, but it can’t help her either.

Lou believes both VRBO and her bank share the blame for what happened.

“VRBO didn’t vet their site for legitimate owners,” she says. “They do not confirm people who put their homes on the site. They had no credit card on file for this scammer.”

How hard can it be to pull this ruse, she wonders. “Just steal pictures of a home for sale, in an exclusive area, put it for rent on VRBO, and then collect funds. No risk,” she says.

This is an interesting twist on the old phishing scam. Lou alleges that the scammers aren’t even trying to hack a legitimate account, but are setting up fake accounts on the site to lure in prospective guests. But Lou’s money is already gone, and she is filing a claim with VRBO, which may pay her up to $1,000 of her lost funds. At any rate, she doesn’t want me to pursue VRBO — at least not yet.

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Rather, she wants me to ask her bank for help. And if it can’t help, she’d like me to pressure banking regulators in the UK, where the scammers apparently reside, to reverse the charges. I have to admit, this is a little above my paygrade, but I’m not afraid to try. (By the way, if there’s anyone reading this who knows about the UK banking system, I could use a little help.)

The bank that handled the wire transfer, First Reliance, “failed to protect me,” says Lou. She has already made inquiries. Apparently, there are certain safeguards in place for wire transfers of over $10,000. Those were overlooked by the bank, she alleges.

After the incident, Lou reached someone at First Reliance and was told that, as far as the bank was concerned, the case was essentially closed.

“I was told immediately they knew about the case, and they were not at fault,” she says.

If I lost $13k on a fictitious vacation rental, I’d be furious. I think she’s smart to pursue her claim with VRBO, but really don’t know what the next step is with the bank or with banking regulators. Clearly, Lou needs help. But who should answer for this crime?

Who should I contact about Lou's case?

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  • Patrick

    Well, we have to end apartheid for one. And slow down the nuclear arms race, stop terrorism and world hunger. We have to provide food and shelter for the homeless, and oppose racial discrimination and promote civil rights, while also promoting equal rights for women. We have to encourage a return to traditional moral values. Most importantly, we have to promote general social concern and less materialism in young people.

  • Bill___A

    I wonder if VRBO should have an escrow setup where funds are ALWAYS put in VRBO escrow and released at an appropriate time. They need to change their business model a bit so as to stop the scammers.

  • sirwired

    VRBO should be treated as nothing more than an anonymous listing service, and trusted accordingly (i.e. no more than you would a Craigslist ad.)

    The VRBO website even has a FAQ on “How can I determine whether a vacation rental owner or property manager is legitimate?” Did she do those steps? Before wiring somebody over $10k I would have.

    Also, they offer an optional insurance product that would have protected $10k for these sorts of problems. Obviously she did not purchase it.

    Perhaps we can be enlightened as to what these banking rules are, because all I can find with a quick Googling is that cash transaction over $10k must be reported to the Feds, and that Bank Wire Transfers aren’t considered cash. (And, in any case, they are just reporting requirements, nothing more. Nothing in those rules requires any sort of verification or delay.)

    Lastly, are there UK rules the receiving bank violated? Because if not, the money is gone; we can assume that the scammers have already withdrawn the funds and ridden off into the sunset, and absent a fairly major legal violation, the receiving bank certainly isn’t going to come up with the cash out of pocket.

  • Jim

    Great idea, but they will never do it. This would lead to them being responsible for the customer being happy.

    Now if they were able to advertise it as an option for a hefty fee I’m sure they would be all over that option.

  • John Baker

    Honestly I feel for Lou but this strikes me as a “blame anyone but myself” for the situation I’m in.

    I’m not sure how her bank has any blame in this. They simply executed her instructions.

    Along the same lines, I’m not sure why banking regulators would get involved based off the claim of someone or an advocate. Beyond that, I’m sure that the money isn’t there anymore anyway. I’d bet it was transferred out almost as soon as it hit the bank.

    For me, this is a classic time to call in the FBI. The amount may be low for them but its a case of international banking fraud. They have the resources to trace the money and the pull with regulators to do something about it.

  • Extramail

    It also seems that the language in the emails were written in broken English. I thought that was one of the burger biggies of detecting fraud. And, I would never wire money – period.

    I agree that, if vrbo wants a cut of this action, then they need to improve their business model. I rented from the vrbo site well over a dozen times when it first got started and only had one bad experience. I wouldn’t even visit their site now based on all of the complaints I’ve read just on this site much less numerous others.

  • cahdot

    trying again i just sent the vbro article to friend whose son is a UK bank regulator for the government…

  • Alan Gore

    VRBO can’t evade respisibility for this one, because she made the booking directly on VRBO’s site. Other reported scams have been ‘phishes’ in which an email or a misspelled URL funnels people to a fake site.

    If VRBO is going to survive, it needs to find a way to validate accounts on its site.

  • Richard

    She made the booking on the VRBO (Apparently, actually HomeAway) site. However, unless HomeAway had a previous report, they would have no way of knowing if the listing were legitimate. At $13,000 per scam, they just need one taker. Also, she either did not read, or ignored, the explicit instructions which state: “…Never pay by cash in advance or instant money transfer services such as Western Union or MoneyGram. These payment methods are highly susceptible to fraudulent activity and if used you will not be eligible for any of the payment protection guarantees offered by HomeAway.co.uk.

    I agree HomeAway/VRBO should verify their listings. But, if this is the first report of this type of scam, they may simply not have been aware of the problem. Also, the report has enough data missing to make HomeAway’s culpability a little questionable.

  • KarlaKatz

    The “stilted” language was an entire row of red flags for me..

  • Trudi

    I understand that VRBO is really just a listing agent, but they present themselves in a manner that seems safe and reliable. I’ve used them a couple of times in the past, once was ripped for more than $800 which helped my decision to never use them again. If they are going to list homeowners, they should vet them. They should give the same courtesy and protection to the renters that they give to homeowners. I still rent vacation property, but never with an owner, never without a credit card, and never without reading plenty of reviews (HOPING they aren’t written by the owners). Not everyone is a crook, but everyone is a potential target. I hope Chris can help, but I doubt there’s much that can be done at this time.

  • travelfly

    Any amount over 10K either in the US or( I believe the UK) would intially be subject to scrutiny because of money laundering, It might be possible to contact banking regulators, homeland security and maybe the FBI for some help..Wire transfers do leave an audit trail, where they were received and to what account and who owned that account..It might take a legal entity to obtain warrents to get this information, but if Lou was sending money from the US, she should start with her local police and make a report, if in the UK, local authorities…

  • Joe_D_Messina

    “Apparently, there are certain safeguards in place for wire transfers of over $10,000. Those were overlooked by the bank, she alleges.”

    I’d be curious what safeguards could have saved the OP in this case. Generally, the bank just does what you tell them to do. “Go pay this person $X” and that is what they do. It’s not really their job to make sure you’re being smart with your money.

  • Ronay

    The fault here appears to lie with everyone involved. Did Ms Lou make any preliminary inquiries to VRBO to find out if this property was legitimate, and if the owner info jibed with that provided to her? Also, I’m surprised her bank did not question the transaction. Im not sure what anyone can do at this point, except perhaps report it to interpol and/or the authorities in the U.K.

  • gpx21dlr

    I would be suspicious of sending money to UK for a CO, USA rental. She did not research VRBO policies/guidelines/rules enough.

  • JenniferFinger

    I don’t see what you can do for her. They demanded the money right away and wanted it sent to a supposedly British account for a place in Colorado. VRBO never steps up to the plate when someone using their name scams people. They would say, and I think rightly in this case, that she should have been more observant. Her best bet is to call in the FBI and report this for fraud.

  • lexusOakland

    I just returned from a delightful 4 days at a VRBO rental. This is easily the 6th or 7th over the past several years. Any problems I have had have been minimal, involving inadequate supplies for a big group or similar issues, but on the whole, my experience has been excellent. There were several things that occurred to me as I read the experience of Ms. Lou (aside from some confusion regarding the use of HomeAway.uk unless Ms. Lou is a UK resident? That is not clear.). Home Away is extremely clear in about not paying cash or making wire transfers, and does all but prohibit payment and communication between owner and traveler outside of the HomeAway/VRBO system. As has been mentioned in other comments, the decision to go outside the HomeAway system to pay cash relieves HomeAway of responsibility.

    Most of the other commenters have noted the inconsistencies in both Ms. Lou’s story and in the approach of the “owner.” I will say this: the first sentence of the “owner’s” response was the giveaway for me: “As you know, the price per night for the selected property…” Selected property??? I have rented often from both VRBO and AirBnb, and have never had a response referring to “the selected property.” The response is always “the cottage” or the “home on Main Street” or whatever the heading of the ad is. “The selected property” indicates a scam immediately, similar to a scam on craigslist when one inquires about a car for sale, or when one advertises a car for sale… which gets a response referring to “the item.” This enables multiple scams, because the scammer need not keep track of which scam is being perpetrated … and logic says there is always more than one!

    If Ms. Lou’s story is accurate, she was scammed and should have known better. There are red flags all over the interaction, and the scammer was not even especially skilled. At the very least she should have read VRBO/HomeAway’s instructions more carefully, especially considering the amount of money passing hands and followed them explicitly. I don’t see that the bank (either) has any culpability, but do feel VRBO should do a better job vetting. Some compensation would be a good will business gesture for VRBO, but I can’t see that they owe Ms. Lou $13000 when she clearly violated the guidelines.

  • Rebecca

    When I worked at a bank, we actually closed an elderly woman’s account because she kept wiring money to scam artists in the Dominican Republic. They weren’t doing anything technically illegal, she was purchasing worthless land. And there was nothing we could do, because it was her money. We went so far as to have one of the guards come in in his police uniform and explain how she was being scammed. And she still wanted to send it. Regulation wise, if it’s in a demand deposit account, the bank can get in a lot of trouble if they don’t give you your money when you demand it. The only exception I can think of is if it’s going to an OFAC country.

  • Rebecca

    The thing is, the fbi literally won’t even look at it if it’s less than a million dollars. Seriously. The US Postal Inspector will take some smaller dollar amount cases, but this is still too small an amount, relatively.

  • judyserienagy

    Oh, this is just an awful story, sad that she was so easily cheated. It seems a law enforcement issue to me. Neither the bank nor the renting agency are responsible for Lou’s actions. A bank generally does not pass judgement on their client’s instructions, that would be chaos. A bank has many rules and regs, but ‘having opinions’ on their customers’ actions is not part of a bank’s responsibility. Consumers using the internet need to understand how the system works, the amount of research they need to do, and the different payment options there are for a VR.
    I am adament that all VR agencies should change their procedures to allow for more protection to renters, and owners as well. As it stands now, they are able to deny responsibility. This is a ridiculous situation, naive people are being cheated on a regular basis. I would like to see Chris’ time and expertise focused on getting these agencies to take responsibility for the consumer.

  • First, permit me to disclose I am a licensed real estate broker (and an employing broker). So, I am sure I will get grief as “another greedy Realtor” I will share that this is one of the greatest challenges nowadays: Craigslist rental scams. This just seems to take the game to a higher level (and quite brilliantly I might add).

    I believe that VRBO and its counterparts should be similarly regulated to ensure a standard of practice, but my Libertarian side says, “That could squash the innovation.” However, these white collar crimes just break my heart as they all seem to taint an industry that I hold in such high regard because of the people of integrity that I know work in it and ruin people’s lives. Anyhow…

    I voted for contact bank regulators. Here’s why: I can’t move large quantities of monies around without hitting a PATRIOT Act (or its successor, USA Freedom Act). This places a strict requirement of knowing where funds go to prevent money-laundering.

    To me, it seems like any bank that is interconnected through the Fed or other major financial network outside the US would have a requirement to “know where you’re sending the money”.

    However, I would start off asking the FBI, as I am sure that there are extra-jurisdictional authorities they have in matters like this.

    In the UK, I think you want to start with the Financial Services Authority. http://www.fsa.gov.uk

  • I owe the team an apology, Apparently, the UK’s FSA has split into two entities:

    1) The Financial Conduct Authority (FCA) can be found at http://www.fca.org.uk

    The FCA regulate the financial services industry in the UK. Their aim is to protect consumers, ensure the industry remains stable and promote healthy competition between financial services providers.

    2) The Prudential Regulation Authority (PRA) can be found at http://www.bankofengland.co.uk

    The PRA is a part of the Bank of England and responsible for the
    prudential regulation and supervision of banks, building societies,
    credit unions, insurers and major investment firms. It sets standards and supervises financial institutions at the level of the individual firm.

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