Why won’t VRBO pay for my lost valuables?

Jovanka Syedy is the owner of a short-term rental newly listed on VRBO.com, and her first experience is a nightmare — a stolen credit card, a thief, and a 30-day hold on her payment.

Question: I am a new short-term rental owner, and just listed my house at VRBO.com. The first guest that booked through VRBO was a thief. I immediately filed a police report and tried to contact VRBO by phone and email several times.

This is my first transaction with VRBO, so it is holding my payment from this booking ($818 + $250 security deposit) for 30 days. Because the credit card the guest used may have been stolen, VRBO says I might not receive any payment at all.

Next, I require my guests to purchase $99 insurance (coverage up to $5,000) when booking my house. But the VRBO system will allow renters to book my house without buying the insurance if the booking is less than 24 hours before arrival. I didn’t know this, and thought I was doing a guest a favor to let her book on the same day. I received no notification from VRBO that the mandatory insurance purchase had been rescinded. So there is a flaw/loophole on the VRBO site that hasn’t been fixed, and I have to suffer the consequences.

This insurance would have covered the $2,885 cost of the items the renter stole from the house, plus what I paid the locksmith to change the locks.

When I finally reached someone at VRBO, the representative said VRBO is an advertising company; hence, they are not responsible. I was also told it’s the responsibility of the homeowner to screen the renters. This was never made clear by VRBO and I believed it screened its applicants. I didn’t receive any reply to my last email.

Between the rental charge and security deposit paid to VRBO, the cost of the stolen items and the cost of changing the locks, I am out $3,953. Can you help me get VRBO to return this amount to me and provide a guarantee that it will not later chargeback the rental cost and security deposit? I believe this is their fault. I’d also like the renter’s profile removed from the VRBO website so she can’t harm other homeowners. —Jovanka Syedy, Corona, Calif.

Answer: I’m sorry to hear about the loss of your items. I’m glad you filed a police report, and hope they will do something to help.

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It’s not clear to me why you believe the credit card the renter used was stolen. From the correspondence shared with us, there is much speculation regarding what would happen if the credit card was stolen, but nothing that confirms it was a stolen card. Unfortunately, VRBO has no power to influence whether a chargeback is made. The agreement between the bank that issued the credit card and the cardholder will govern the processing of any chargeback. Some cardholder agreements will reimburse the cardholder while not recovering the charged amount from you, but others will, as VRBO mentioned, charge the amount back to you.

If there is a chargeback, your only recourse is to go after the thief. You’ve already taken the first step by filing a police report. If you can locate the thief, you can also sue in small claims court to recoup your loss. VRBO indicates that their credit card processor, VacationRentPayment, will try to help you recover the funds, but it’s important to remember that banking law and the cardholder agreement dictates the process that will be followed if the credit card used to pay your rental fees was stolen.

When you finally heard back from VRBO, the representative informed you that the site is merely an advertising site that helps you receive payments in a secure manner. All screening of your guests and any problems resulting from your rentals are your responsibility.

I visited the VRBO site and reviewed their terms and conditions, and it does indicate that this is your responsibility:

User verification on the Internet is difficult and we cannot, and do not assume any responsibility for, the confirmation of each user’s purported identity. We encourage you to communicate directly with a traveler or member through the tools available on the Site, though even this does not assure you of the identity of the person with which you are communicating. We further encourage you to take other reasonable measures to assure yourself of the other person’s identity and, for travelers, of the property and relevant details of your booking or proposed booking.

Additionally, the site also indicates VRBO “is not a party to any rental transaction and assumes no liability for legal or regulatory compliance pertaining to rental properties….” Further, it states that they will determine “at our sole discretion” whether they will provide information to assist with investigations, litigation, or administrative proceedings.

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This last piece of information is most disturbing. While the VRBO representative told you that they would provide information to help you get compensation after the theft, the company actually stipulates that it doesn’t have to — and might not, if it doesn’t want to do so.

The representative also referred you to the information regarding the purchase of insurance by the renter. He insisted that you would have received information that the rental was within 24 hours prior to the rental, and that she would not be able to purchase the insurance through the site. You said you received nothing. He also claimed they had tried to call you several times, but you say you never received the call. I recommend confirming by phone and in writing that the contact information they have for you is correct.

The policy of keeping the rental and security deposit funds for 30 days was explained to you as “protecting both you and the renter.” I certainly understand how it might protect the renter, but I’m confused how holding an owner’s money for 30 days provides any protection to the owner. I’m sure it provides some interest income to the processor, though.

There is an owner’s toolkit online for all the HomeAway portfolio sites, which might have provided you with some information on starting your rental property business, but much of it concentrates on how to create a good advertisement. The information on insurance, verifying identities, and other important limitations is there — it’s just hard to find.

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I think all the HomeAway brands could be far more clear about what they actually do — and don’t do — for both renters and owners.

I recommend reading all the materials provided to you (and those available online) before entering any kind of contract. If anything is confusing, ask questions. If the company isn’t providing the services you need, find another business that will, or understand that you have to do much of this work yourself. A quick online search revealed multiple sites where both vacation home owners and renters complained about the lack of verification on the HomeAway sites.

In a follow-up email you requested to speak with a supervisor, and the representative who replied declined, saying he represented management. At that point you could have reached out to the Homeaway.com executives we list on our site.

Instead, you reached out to us. While we are certainly sympathetic to your predicament and wish there was something we could do, in the end, you entered into an agreement with an advertising site, and we are unable to help. Hopefully, you have an insurance policy that covers a rental business, and it can assist you with recouping some of your losses from the theft. The police report should help. We hope this unscrupulous renter will be caught and punished — and you will be able to recover some of what you lost.

Michelle Bell

Michelle worked in the travel and hospitality industry for almost two decades. Born in Germany, she has lived in 15 states and two foreign countries, and traveled to more than 35 countries. After living and working in Southeast Asia for several years, she now resides in New Orleans. Read more of Michelle Bell's articles here.

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