Don’t get scammed by your next vacation rental – here’s how

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By Christopher Elliott

The vacation rental had “great pictures” but no reviews on Maybe that should have tipped off Melissa Mesku when she found the vacation house during a popular convention week in Austin. She realized that she got scammed.

“The home was more of a punk-rock flop house,” says Mesku, a magazine editor from New York. “Parts of it were unfinished, and it was nearly unsuitable to live in.”

Welcome to the wacky world of rogue rentals

Vacation homes that don’t meet basic living standards, don’t follow local regulations and, in extreme cases, don’t exist. It’s not a new problem, but in a sharing economy, it could soon become your problem.

You can take steps to avoid these iffy accommodations. And the vacation rental industry is doing something about it, too.

Mesku complained to after her four-night stay and sent pictures of the dilapidated home. It refunded $660, about one-third of her rate, and sent her a $30 gift certificate.

“They were quite generous,” she says.

Funds only released 24 hours after check-in

Airbnb’s system is set up to prevent rogues from ruining guest vacations, according to the company. It doesn’t release funds to its hosts until 24 hours after check-in, which allows Airbnb to withhold money if the accommodations aren’t as advertised.

“In several places, we’ve worked with cities to establish a mechanism for collecting and remitting taxes,” says Jakob Kerr, an Airbnb spokesman. For example, in San Francisco and San Jose, Calif., taxes on a rental are sent directly to the city, just as an employer would withhold federal taxes.

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In an effort to draw a clear line between legit vacation rentals and rogues scams, one trade organization recently threw its weight behind an industrywide campaign to rein in illegal, short-term rentals that dodge regulations and taxes.

Onsite Property Management Association (OPMA)

The OPMA represents the hybrid condo hotel lodging sector, said rogues hurt consumers, and not just by offering a shoddy product. When they fail to pay their taxes, cities lack money for infrastructure. So over time, the destinations start to look as run-down as the rogue rentals.

“By supporting local governments, we can significantly reduce these ongoing problems that more and more consumers are faced with every day,” says Rick Fisher, OPMA’s executive director.

It’s a problem with real consequences to guests

Rogues don’t just dodge taxes, they often also cut corners on service, according to Julius Bruggeman, president of the Smyrna Beach Club in Smyrna Beach, Fla.

“The rogue renter is not necessarily aware that they are rogue,” he says. That is, until renters have a problem onsite and don’t know where to turn for a solution.

“If they lock themselves out, who lets them in, and how long does it take for relief?” he says. A dishonest condo owner may instruct guests to avoid the rental office for fear he might be discovered, which forces renters to “sneak around” the property.

“They can easily have a bad experience and thus soil the reputation of the complex,” he says.

Preventing these shenanigans is not easy

Recently, a reader’s son encountered a situation where he was locked out of his vacation rental. Unfortunately, the owners were unavailable to assist him with access. Rental sites say they do their best to prevent these shenanigans, but it’s not easy. HomeAway, the largest vacation rental website, relies on user reviews to ensure quality, and it will investigate a listing when it’s reported as unclean. It offers an application for rental owners to make tax compliance easier.

“It is the responsibility of the owner or property manager to be familiar and comply with all laws,” says Carl Shepherd, HomeAway’s chief executive. (Related: Something’s still ‘phishy’ about vacation rentals.)

The takeaway is clear: now more than ever, you could end up in an unlicensed, substandard rental if you’re not careful. Observers such as Andrew McConnell, the CEO of a new vacation rental start-up called VacationFutures, a company that connects vacation homeowners with professional vacation rental managers, compares today’s industry to yesterday’s music industry, pre-Napster.

“It’s in a dangerous position,” he says. “It’s an illegal but unstoppable trend.”

Only this time, your vacation hangs in the balance.

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How to avoid being scammed

My advocacy team and I put together this thorough guide to assist you in making informed choices when selecting your next vacation home.

• Rent from a reputable source

Typically, a professionally managed vacation rental or a by-owner rental belonging to a trade group such as the Vacation Rental Managers Association or Onsite Property Management Association is a sign your unit is on the up-and-up.

• Look for guarantees

HomeAway and Airbnb have customer guarantees that can ensure your rental will meet minimum standards. Wyndham Vacation Rentals even offers a “bill of rights” that promises a professionally managed and clean rental.

• Learn to recognize a rogue — and report it

Vacation rentals that don’t play by the rules tend to price their rentals aggressively and demand payment by wire. “It’s the cardinal rule,” HomeAway’s Shepherd says. “If the deal is too good to be true, trust your instincts, and report it to the website in question.”

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Christopher Elliott

Christopher Elliott is the founder of Elliott Advocacy, a 501(c)(3) nonprofit organization that empowers consumers to solve their problems and helps those who can't. He's the author of numerous books on consumer advocacy and writes three nationally syndicated columns. He also publishes the Elliott Report, a news site for consumers, and Elliott Confidential, a critically acclaimed newsletter about customer service. If you have a consumer problem you can't solve, contact him directly through his advocacy website. You can also follow him on X, Facebook, and LinkedIn, or sign up for his daily newsletter.

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