Vacation Rental Fraud Scam Alert

By Tiffany Ross- Consumer Resource Officer

Over the past year, the North Carolina Real Estate Commission has released several detailed scam alert articles, including Fake Seller / Fake Buyer Scam Alert, Notary Fraud / Deed Fraud Alert, Be Aware of Scam Sellers, and Rental Fraud Scam Alerts. In addition to these, NCREC, in conjunction with the North Carolina State Bar and Investors Title, hosted several Wire Fraud Conferences across the state. Vacation Rental Fraud is the latest scam that we want to educate consumers about.

Vacation Rental Scams

Many vacation rental scammers use reputable vacation rental websites to advertise, so the scams are harder to spot. These scams affect both the vacation rental tenant, and the property owners, as bad actors will pose as either to run their scheme.  For those looking to rent a vacation property, there may be a fake listing where someone asks you to send money in advance as a deposit or full advance payment.  Additionally, scammers may hack the email accounts of actual property owners or managers and then contact legitimate travelers and request payments to be made providing different instructions from previous deposits paid. Beware of sending any funds without verifying the receiver is legitimate.

For owners looking to rent out their vacation property, there are several scams to be aware of, including fake guests that will send a fraudulent check for more than the rental rate, and then ask for a refund of the difference.  Real guests sometimes will stay and damage the property or plant insects in the property and claim it was damaged on arrival or infested.  Another example is parents knowingly renting  properties for their underage children for spring break without an adult being physically present to supervise and prevent damage to the property or underage consumption of alcohol.  Being aware of these scams and not falling for these tactics can prevent the loss of hundreds or even thousands of dollars.

Action You Can Take:

1. Never send money to someone online or electronically without verifying it is going to a legitimate place.  Do your research and independently contact and verify that the person or firm who will be holding any money is a real attorney, licensed real estate broker, or the true property owner.
2. Be skeptical of anyone asking for money upfront before completing any paperwork or written or online agreement concerning the rental.  Make sure that you are communicating with the actual property owner or a licensed real estate broker.  Look up the property owner in public records for the county (typically through the tax department) and make sure to verify the identity of the person and their contact information.  To verify someone is a licensed real estate broker in NC, search the licensee look up page.   From this page, verify that their email and other contact information matches the advertisement.
3. If you are scheduling your vacation rental through a well-known or reputable platform, don’t leave the main app or platform.  Any protection offered to users of the platform ends when communication or payments are made by any other means than the platform itself. 
4. Search legitimate websites, or actual licensed real estate broker property management company websites for true vacation rental listings by licensed real estate professionals.
5. Be especially cautious if you are asked to pay with wire transfers, mobile payment apps, crypto or similar methods.  If possible, use a credit card to make payments preferably with zero fraud liability for an added layer of protection.
6. If you are an owner/property manager, change the access codes and/or WiFi passwords to the property after each guest.  Adjust your policies to be clear about who is required to be present during the rental term and any action that will be taken if unauthorized guests are found or if underage guests are left unsupervised.
7. Don’t fall for urgent requests or offers that are too good to be true.  Decline offers that seem suspicious.  Look for the Red Flags listed below and beware of these tactics.

Red Flags That You May Be Dealing With a Fake Owner/Manager Scammer

1. You can’t talk to an actual person, or they don’t want to answer your questions about the property or area/local attractions.
2. The listing has typos or poor grammar.
3. The price is too good to be true.
4. Reviews and ratings are short or non-existent.
5. They ask for rent, a security deposit, or other up-front money before signing a lease or agreement.
6. There is no screening process or any attempt to verify identity of tenant.

What To Do If You Are Already a Victim Of a Vacation Rental Fraud Scam in NC

If you responded to a fake ad and sent money, but never heard from the scammer again, contact the North Carolina Attorney General’s office to notify them of the scam and provide as much information as you can.  If the property is located outside North Carolina, contact the Attorney General’s office for that particular state.  You should also report the incident to the service or website you were using, and/or the actual owner/property manager if you were a tenant victim, as well as the Federal Trade Commission.  You can also contact local law enforcement (sheriff or police) and submit an internet crime complaint to the FBI to report the scam and see if there is any chance of recovery.

How You Can Protect Yourself or Your Clients

If you work in vacation rental property management and have clients who rent their vacation properties to tenants, educate them on these dangers and assist them by enhancing your screening processes of potential vacation rental tenants.  If you are working with a vacation rental tenant, provide information like this article to help them avoid the scams and traps, and assist them with carefully verifying the vacation rental details.  Stay in contact with them, and make sure they are aware of the NC Vacation Rental Act. If you are considering a vacation rental, be sure to verify that the rental is legitimate and watch out for the red flags above to protect yourself in the process.

If you or your clients have a problem with a vacation rental, and a licensed real estate broker is involved, contact the Commission’s Regulatory Affairs Division at (919) 719-9180. If there are concerns about the actions of an unlicensed property owner managing their own property, or other unlicensed property management activity, contact this office and the Attorney General’s office (877) 566-7226.