Unfortunately, vacation rental fraud does happen.
Be careful when it comes to checks and money orders and consider the following:
It appears that various counterfeit cashiers check and money order scams are finding their way to vacation rental websites. We feel that all vacation rental home owners should be aware of this scam to ensure that this does not happen to them. If someone you don’t know wants to pay you by check or money order and wants you to wire some of the money back, beware! It’s a scam that could cost you thousands of dollars. There is no legitimate reason for someone who is giving you money to ask you to wire money back.
Counterfeit cashiers check and money order scam
Please remember that all monetary transactions involve risk, and if anything seems out of the ordinary, it might warrant extra scrutiny. The specific scams we have been alerted to go something like this:
- Cashier’s check or money order is offered for deposit/rent.
- Value of cashier’s check exceeds the actual price – renter asks you to wire/send the balance back.
- Banks will cash the fake cashier’s check, release the funds to your account, and then hold you responsible when the check is later determined to be fake.
- Cashier’s check/money order is offered for deposit/rent.
- Value of cashier’s check/money order is the correct amount, however, the renter immediately cancels and asks you to wire/send the balance back (and keep a re-booking fee for the cancellation). One vacation home owner shares her experience. “I received the money order from a woman’s address in Denver, Colorado. The letter was postmarked in Brooklyn. The money order had a Chicago zip code on it and was wrapped in carbon paper so that the scan machines couldn’t detect anything. The Nigerian who has been in touch with me by email and phone told me to send the wire to someone in the Netherlands.”
- Banks will cash the fake cashier’s check/ money order, release the funds to your account, and then hold you responsible when the check is later determined to be fake.
Remember, counterfeit cashier’s checks and money orders are usually cashed by your bank and the funds are released to you. It might take many weeks before the bank determines it is fake and holds you responsible for the amount. The scam is able to progress because, though the checks are counterfeit, they may look good enough to fool bank tellers.
You should never accept a cashier’s check or money order for an amount more than is owed to you. And please do not wire money to customers (see this FTC site for more information).
If you receive a cashier’s check or money order for your vacation rental, please do not immediately issue any refund to a renter until you verify the check is valid. Please contact your bank for more information on confirming the validity of a cashier’s check or money order, especially if it is of international origin.
In addition to this “overpayment scam”, be aware of some of the common fraud attempts on the Internet. They involve:
- Phishing: This is a term coined by computer hackers, who use email to fish the Internet hoping to hook you into giving them your logins, passwords and/or credit card information. The phisher sends an email impersonating a legitimate company (called “spoofing”) such as your own Internet service provider or financial institution. The email then directs you to a bogus site to update your account information.
- Spyware: This is software that covertly gathers user information, such as passwords and credit card numbers, through the user’s Internet connection without his or her knowledge.
- Identify Theft: This is the fastest growing type of fraud in North America; consumers and businesses lose billions annually (statistics click here). ID thieves can, and do, use all sorts of tactics to take your personal information: looking through your garbage or recycling box, pretending you need to provide information in order to claim a prize or lottery winning, stealing your mail, placing bogus newspaper ads for jobs locally and internationally, sending unsolicited emails posing as your financial institution, etc.
- Nigerian frauds: Here, it starts with a letter, fax or email from Nigeria marked “urgent” or “confidential.” The sender claims to be an official of a company or government ministry who is trying to transfer millions of dollars out of the country. The letter writer proposes depositing the money in a trustworthy bank account – yours – in exchange for 30 per cent or more of the transferred funds. To get in on the action, the business, consumer, or organization must provide its bank account number and other company information. When that information is provided, the business or individual is then pressured to start sending large sums of money to cover the transfer of funds, the payment of taxes or the bribing of Nigerian officials. Of course, the millions of dollars claimed to be in Nigeria do not exist.
- Work-at-home or employment scams: Job seekers are vulnerable to scams promoting work-at-home schemes, envelope stuffing and be-your-own-boss offers. Other schemes guarantee access to the “unadvertised job market” for a fee. Some may even be illegal pyramid selling schemes designed to enrich only the plan’s originators. Watch for unreasonable claims of weekly earnings, non-disclosure of the earnings of typical participants, hefty upfront fees or large inventory purchase requirements with vague return policies.