Sharing economy scams grow with the sector

A report in the LA Times yesterday outlines how scam artists are keeping pace with the rise of the sharing economy, and finding new and creative ways to rip-off customers. Home-sharing scams seem particularly rife, with activities such as bogus listings and fake payment profiles, often hijacked from legitimate listings. A recent report by the Federal Trade Commission (FTC) that estimated the total value of sharing-economy transactions was over $100bn illustrates the scope of the problem. FTC Chairwoman Edith Ramirez said that "targeted regulatory measures may be needed" to protect consumers in this new business environment.

Jerome Jacques received a call the other day from a production company looking to rent his hilltop Malibu house for a movie shoot.

He asked how they found out about his home. The answer: They saw it on Airbnb.

Which was a problem.

“I don’t list my house on Airbnb,” Jacques told me.

The so-called sharing economy, dominated by the likes of Airbnb, Uber and Lyft, has attracted millions of consumers. So it shouldn’t surprise anyone that scammers also have turned out in force to grab a piece of the action.

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“We hear often about scam attempts,” acknowledged Nick Shapiro, a spokesman for San Francisco-based Airbnb. “We tell people until we’re blue in the face to never go off our site and never wire people money.”

Home-sharing scams include bogus listings and aggressive efforts to get people to part with money before arriving for their stay. More sophisticated scammers might run the con by hijacking a legitimate listing.

The common denominators to each racket are that, at some point, the scammer will insist on communicating directly by phone or email, or will steer people to another site to complete the booking process. Then a request will be made for money to be wired to a specific address.

The services basically serve as middlemen, ensuring that everything’s on the up and up. The goal of scammers, therefore, is to get the sites out of the picture and deal one-on-one with potential victims.

You’d think no one would fall for this sort of thing, but you’d be wrong. For every 100 people who recognize a swindle taking shape, there will always be one who thinks he’s getting a sweet deal.

That’s the guy scammers are going after, the one who believes it when a purported Airbnb host says he can lower the price by cutting out the website and not paying the usual 3% commission.

Jacques, 49, isn’t new to home sharing. He lists his Malibu property on the websites VRBO and HomeAway.com for about $1,200 a night.

“Make your stay a unique and unforgettable experience,” the listing says. “Enjoy sunrises and spectacular ocean views all year round in a quiet and majestic modern property overlooking the bay of Santa Monica.”

Jacques said he listed his house last summer on Airbnb but decided he didn’t like the site. He deleted his listing within a month, sticking instead with the other home-sharing services.

After being alerted by the movie crew, Jacques returned to Airbnb and, indeed, there was his house, with photos and descriptions lifted from his other listings. The host was identified as “Orly.”

Orly told me by email that “I got permission to list it from Mordi.” I asked who Mordi was and how I could reach this person, but Orly declined to comment further.

Jacques said he never gave approval to anyone — Mordi, Orly, whoever — to list his house on Airbnb.

Airbnb took down the listing after Jacques reported the situation and submitted his deed to verify ownership of the property.

“It’s very, very frustrating,” he said. “I work very hard to build a great record for guests. Now I have someone undermining my hard work.”

A recent report by the Federal Trade Commission that estimated the total value of sharing-economy transactions at more than $100 billion illustrates the scope of the problem.

FTC Chairwoman Edith Ramirez said that “targeted regulatory measures may be needed” to protect consumers in this new business environment.

Still, it’s a challenge to protect people once they’re lured into one-on-one communication with a cheater.

Shapiro said Airbnb scans images in search of tip-offs that a scam may be in the works, such as a host including his personal email address. When something suspicious is found, the listing is removed and users who may have interacted with that account are notified.

“We immediately take action to shut them down,” Shapiro said.

He said all communication between a renter and host should remain on the website until a deal is struck. Contact information should only be exchanged after a booking has been made. Airbnb only makes payments available to hosts 24 hours after a guest has checked in

The site has a security section that runs down what you need to know to protect yourself. It’s worth a read.

The company also notifies users multiple times during the booking process not to be duped into going off-site or circumventing Airbnb’s payment system. Pay attention. These warnings are for your own good.

Shapiro advised travelers to always read a listing’s reviews before booking a property, especially other guests’ reviews of the host.

“As things like this become more popular, there will be more attempts at scamming,” he said.

In other words, watch your back. Not everyone you’ll meet in the sharing economy has your best interests at heart.

David Lazarus’ column runs Tuesdays and Fridays. He also can be seen daily on KTLA-TV Channel 5 and followed on Twitter @Davidlaz. Send your tips or feedback to david.lazarus@latimes.com.