With vaccines on the rise and restrictions lifting across the province, many people are looking to take advantage of the summer months by vacationing with family and friends. International travel is still a somewhat restricted proposition, and so the domestic rental market has been hotter than ever this year, with people looking to escape the city for cottage country. However, if you are considering renting a cottage property, be warned that there has been a dramatic increase in vacation rental fraud in recent months. Below, we will outline the fraud schemes that have been reported to date, and provide tips on how to avoid falling prey to a fraudster while booking your summer vacation.

Online Vacation Rental Fraud Up Since 2020

According to the Canadian Anti-Fraud Centre (CAFC), there was a 15% in vacation rental fraud in 2020, with nearly 400 people reported being duped out of over $550,000 last year alone, and it shows no sign of slowing down this year. With people largely limited to domestic travel, scammers are taking advantage of this fact by creating online advertisements designed to look like legitimate rental opportunities. The ads are placed on sites such as Facebook or Kijiji and include photos and other property information to seem legitimate. Interested parties often even communicate with the “owner” over the phone or online before being asked to provide a deposit.

Once the deposit is sent, however, some find that the owner becomes unresponsive, alerting them to the scam. Others have actually travelled to the address provided, only to find that the property was not there, or the actual owners had no knowledge of the arrangement.

The problem became so widespread in the summer of 2020 it prompted the Ontario Provincial Police to release a statement warning travellers to be extra vigilant when booking rentals online.

How to Recognize a Potential Rental Scam

Fraudsters are great at looking legitimate. Many will lift photos directly from old real estate listings to make a fraudulent rental ad appear indistinguishable from a valid one. However, there are some signs to look out for:

1. The ad is posted only to social media or person-to-person transaction sites. Of course, not all of these ads are fraudulent, but if you find a property posted to Facebook, you are missing out on the additional vetting a rental agency can provide, as well as online reviews posted by past renters. It means you’ll need to do some additional digging to verify the ad for yourself before sending any money.
2. The “owner” is placing you under pressure to send funds. If the owner seems impatient and is pressuring you to send money too quickly, this should be a red flag. The owner should be happy to answer your questions, and should also want information from you to protect themselves before committing to a rental.
3. The “owner” asks for a direct transfer. Direct transfers are immediate, and often cannot be reversed if you later discover a transaction was fraudulent. If this is the only way to pay, again, do some additional research before sending any money.
4. The “owner” won’t allow you to see the property in person. If you request an in-person meeting or property viewing and the owner won’t accommodate it, exercise caution before proceeding.

Tips for Avoiding Becoming a Victim of Rental Fraud

While most people use internet listings to find vacation rentals, there are ways to ensure that the listing you’re viewing is legitimate. To avoid handing a deposit over to a scammer, we’ve collected tips you can implement to stay safe when looking for a vacation rental for you and your loved ones.

1. Use a reputable rental agency. Many of those who were scammed dealt one-on-one with a person claiming to be the property owner, usually through social media or person-to-person sales sites. To help ensure you are working with a legitimate vendor, it may help to limit your searching to sites hosted by legitimate organizations designed to help match property owners with potential renters. Sties such as Airbnb and VRBO take steps to verify a property owner before they allow them to list properties to the site, providing renters with an extra level of protection. There are also many local organizations which have been in business for years, and have earned reputations for facilitating legitimate transactions between parties in Ontario and across Canada. Let one of these organizations do the work for you.
2. Visit the property ahead of time. Before sending an expensive down payment via direct transfer, it is wise to visit the property in person if you can. If you it’s feasible, you should make it a point to meet with the owner and see the proerty in person before signing a rental agreement and handing over the deposit. Of course, if you do make such a trip, you should always take someone with you; never go alone. If an in-person visit isn’t feasible due to distance, a video chat with the owner can be beneficial as well, allowing you to see them in their property before paying any money.
3. Do your research. If you’ve found the property of your dreams online, take some time to do a litte additional research. Many vacation rental sites allow renters to post reviews of their experience, which can provide much-needed insight for future renters. If the listing isn’t with such an agency, search the address online, look for other reviews, and find out everything you can before committing. If there is no information online, this should prompt you to make additional inquiries of the owner before proceeding.

Contact Milosevic & Associates in Toronto for Experienced Representation in Civil Fraud Matters

If you have a question about civil fraud or similar issues, the highly skilled Toronto corporate lawyers at Milosevic & Associates can help. We can provide you with advice and guidance suited to your unique situation, and we work proactively to help clients limit losses whenever possible. Call us at 416-916-1387 or contact us online to learn more about how we can help.