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Airbnb and rental scams are more common than you think, report warns

The Better Business Bureau says more than 5 million people have fallen for bogus listings on rental sites.

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Airbnb CEO Brian Chesky during an event in February 2018.

James Martin

Rental scams are happening through online sites at a "tremendous volume," according to a new report by the Better Business Bureau. On sites like Airbnb, HomeAway, VRBO, Craigslist, Zillow, Trulia, and Apartments.com, fraud victims have reportedly lost millions of dollars over the last four years.

The Better Business Bureau said it's received 1,352 reports of scams from consumers from 2016 to October 2019. The agency also cited data from the Apartment List, which conducted a survey on rental scams and found that 43% of people who use online sites for housing and rentals have encountered some type of fraud, although not everyone falls for it. 

The number of people who have lost money to such scams is still steep. According to the Apartment List, about 5.2 million people have lost money to fraudsters. The average loss of each scam was $400, and one in three victims lost more than $1,000.

"People think it's rare," said Steven Baker, author of the report and an international investigations specialist for the Better Business Bureau. "God I wish I could tell you that's true, but it sure as heck isn't."

While the majority of scams seem to happen to people searching for permanent housing, vacation rentals sites -- like Airbnb, HomeAway and VRBO -- also have seen an uptick of complaints over the last few years. 

Fraudsters carry out these schemes through a variety of ways. Sometimes they copy a real listing and then post it as their own. Other times they try to get vacationers to carry out the transaction off-line, which typically ends up with unsuspecting people wiring money to criminals.

In October, Vice detailed an elaborate scheme on Airbnb involving a bait-and-switch scam that had fake host profiles and rentals. When vacationers showed up to the rentals they were told the original housing was damaged and they must stay elsewhere. The alternative housing was often dirty and without amenities.

An Airbnb spokesman said that the company's site is safer than many others because it has protections like user reviews and a payment system in which the host never has the credit card number of the renter. Airbnb also doesn't pay the host until the renter arrives. 

After Vice's article published, Airbnb's CEO Brian Chesky announced the company would additionally start a "guest guarantee" as of Dec. 15. Under the guarantee, if a guest checks into a listing and it isn't as described online, Airbnb will rebook the guest into a new place of greater or equal value, or, if unavailable, it will refund 100% of the payment.

While Airbnb tries to keep scammers off its site, fraudsters are "smart, experienced, and determined," reads the Better Business Bureau report.

"These crooks are usually ahead of the technology curve," Baker said. "And they're very good at it. These are industrious, large-scale, organized groups."