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Airbnb Scam Prompts Full Verification Process, Guest Guarantees

Airbnb rental scam

Digested from the New York Post

Airbnb will be checking all its listings after a scam that ran across eight cities.

Airbnb will verify every one of its 7 million listings by Dec. 15, 2020, to ensure their validity, according to its CEO Brian Chesky, as reported in the New York Post and reflected in the company’s new terms of service.

Speaking at a New York Times event, Chesky called the verifications the most significant in the company’s history. They come less than a week after Vice released an expose on a scam than ran through at least 94 Airbnb listings in eight cities. In another incident, five people were shot dead at an Airbnb house rental in Orinda, Calif., on Oct. 31. Chesky said his company is “making plans to be 100 percent verified by 2020,” according to The Verge.

“We believe that trust on the Internet begins with verifying the accuracy of the information on Internet platforms, and we believe that this is an important step for our industry,” Chesky wrote in a staff email.

The company will now offer a guarantee for guests, The Verge reports. “If a listing is not as described, Airbnb will attempt to find them a new place that’s of equal or greater value, or else fully refund them,” Chesky says.

The scam, which appeared to be intricately organized, involved fake phone numbers and email addresses. Hosts were said to have informed guests of plumbing issues at the original location shortly before check-in, moving them to alternative housing described as a “flophouse” in order to keep the reservation intact.

After one night, guests were kicked out with their booking technically completed, making it difficult to ensure a refund.

The announcement of the verification precedes Airbnb’s plans for an initial public offering scheduled for next year.

For the multifamily housing industry, this news highlights a major weak spot in short-term rentals, which have been a point of contention as well as a new-found revenue source for many owners since entering the apartment industry roughly five years ago.

“To me, this represents the ongoing maturation of the space,” says Donald Davidoff, Founder, D2 Demand Solutions, Inc. “It’s unfortunate that it took an expose to motivate Airbnb to move, but that's often how it works with new things. Fraud has affected a very small percentage of listings, but much a rotten apple can spoil the whole bunch.”

Nevertheless, with effort and careful management, Davidoff says that potential for success remains for apartment operators using short-term rental strategy. “Presuming that [Airbnb] does a real job of verifying its listings, and the announcement is not just veneer, it should make the platform that much more reliable and robust,” he said. “That’s good for anyone participating on the platform.”

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