VRMA

    Vacation Renter Security Quiz Part 1: Are You Prepared?

    There is fraud risk everywhere on the Internet, and with their skyrocketing popularity, vacation rental websites are no exception. If you are a vacation rental homeowner or property manager, and use an online marketplace to rent out your vacation home, it’s important not to take the platform’s security measures for granted. While advanced technology can usually spot fraudsters, there are also actions that you should take to ensure that you do not become another fraud statistic, or be taken advantage of by your renters looking for loopholes in your rental contract. 
     
    To see if you are maximizing security measures to prevent being victimized, take this short quiz on the vacation home rental process:
     
    1. You have listed your vacation home online and chose to use the online marketplace’s rental agreement. What is your next step?
    A.    Accept the agreement’s terms and move on; it’s the marketplace’s job to police these transactions. If something goes wrong, it’s on them to make it right.
    B.    Double-check the agreement to make sure the financial numbers are fair and then accept.
    C.   Go through the agreement with a fine-tooth comb, to the point of memorization.
    D.   Find a lawyer to help you decipher the terms and conditions of the agreement.
     
    The correct answer is C. There are some refund or cancellation policies that are fairly significant and may get you into trouble if you ignore them. For example, many agreements have a 30-day cancellation policy, where the renter receives all their money back if they cancel 30 days before the date they are scheduled to arrive at the vacation home.  However, these policies tend to overlook a common scenario: The renter secures the home only a couple of weeks before the scheduled arrival and then cancels the following week. Because the reservation was originally made inside the 30-day cancellation window, it is impossible for the renter to adhere to the cancellation policy. While you did not force the customer to book their stay at the last minute, you are still at risk of losing the amount your renter paid. This is because the card associations (ie Visa, MasterCard) hold the merchant responsible for making sure their cancellation policies are clear. This renter that both booked and cancelled their stay with you could dispute the charge with their credit card company, which will result in a “chargeback,” or a forced refund back to your renter.  
     
    With answer A, it’s important to note that these agreements, at best, tend to be written in a simple fashion that doesn’t get very specific in order to meet the basic requirements of all marketplace users. This can leave you at risk of falling victim to loopholes. At worst, these provided agreements seek to minimize the website’s responsibility if something goes wrong. Read through the agreement you use with a Devil’s Advocate point of view. Play out the worst possible scenarios when looking over your rental policy to understand where the risks are. 
     
    For the rest of the quiz, visit the blog next week. Learn more about what to do when an online prospective renter provides credit card payment, as well as once payment goes through and the renter shows up at your door.

    by Heidi Soberanes, Director of Global Chargebacks for YapStone
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