Over Christmas, The Mail on Sunday reported the arrest of a 37 year old party girl on charges of fraudulently sub-letting a £1.5m central London apartment. The property owner thought she was an NHS doctor, as her references suggested, but in reality the £800 per week home was being sub-let for up to £600 per night for what neighbours described as drug-fuelled parties. But it’s not just owners of high-end central London properties who are at risk from fraud.
Whether it’s fake documents, stolen identities, illegal sub-letting or prostitution, the potential for fraud is a real headache for owners looking to holiday-let their property. The meteoric rise of AirBnB has brought short-term letting into the mainstream, and the tax benefits of holiday letting over residential letting have encouraged many second-home owners to give it a try, but few appreciate the risks.
Absentee landlords are the most common victims. Fraudsters, for obvious reasons, prefer to avoid face-to-face contact, which is why Quay insists guests collect keys in person from its offices. We are also on our guard for guests who turn up just as the office is closing – they reason that staff will be keen to get away, so might not make the proper checks. The fact is we check more closely!
If guests can’t produce photo ID which corresponds with the booking name, we won’t release keys, and we won’t release them to anyone claiming to be collecting on behalf of a friend, as it could be that the card used to book the holiday is stolen. If homeowners do receive a fraudulent payment, they don’t usually find out for a week or two, when the dreaded ‘chargeback request’ hits the doormat, and if they can’t prove the correct CVC number, registered address and/or 3D secure password was used, then they will be duty-bound to return the money to the genuine cardholder – invariably after the holiday has been taken and the ‘guest’ departed.
Nobody is immune from fraud, although the person who booked a long weekend with Quay a couple of years ago must have cursed his luck when he managed to steal a card from an employee of a credit card company! The genuine owner of the card realised within an hour that his card had been used, and contacted Quay. We organised a welcoming party from the local constabulary, who lay in wait in our meeting room and burst out when the guy arrived – you should have seen his face!
The World is forever shrinking and we accommodate many foreign visitors, but it is much harder to verify foreign-registered cards, where banks often don’t offer password protection. There is also likely to be a longer delay in genuine card holders receiving notification that their card has been cloned. We fell victim to what turned out to be a Turkish card just before Christmas. It took two weeks before the genuine cardholder’s bank caught up with the transaction, notified the merchant service provider, who in turn posted the chargeback notice to us – and of course the ‘businessman’ was long-gone by the time it arrived. It was an eye-opener – the passport ID was also a very good forgery. We have since invested in a UV scanner which shows up the watermarks – so if you’re out there Mr Sean Page, I wouldn’t book again..!
The internet has transformed many businesses, and the oldest profession is no exception. Pop-up brothels don’t just happen in the major cities. One retired couple who let their holiday home in Baiter Park were shocked to receive a call from us to ask if they were aware their house was being used by prostitutes! We helped them resolve the situation, and they rapidly became clients, as it dawned on them that running it themselves was just too risky. In our business, you get to recognise the signs – 3 or 4-night mid-week bookings, girls from certain countries, particularly those connected by budget airlines. They usually do the grand tour, spending a few nights in each town, and clients are always pre-advised through certain ‘specialist’ websites.
Three prospective tenants in Harbour Reach fell victim to a particularly deceitful con in 2017 when a holiday-let apartment, rented for a week, was ‘sub-let’ by a con-artiste to three different couples, who all believed they had agreed a six-month tenancy with the owner’s brother. The flat had been advertised on-line at an attractive rent, creating huge interest. Each party handed over a month’s deposit in advance, in cash, and one handed over almost £2,000 in up-front rent and deposit at a rendezvous in a public car park. It was only when the new tenants ‘moved in’ that they discovered holiday literature, welcome packs and guidebooks stuffed into cupboards and drawers, and by then the ‘landlord’ was long gone.
The problem with fraud is that it is constantly evolving. As agents, we still get caught from time-to-time, and we’ve had years of experience in spotting the signs. For individuals advertising their property on-line, hoping to capitalise on an under-used asset, the dangers should not be underestimated. Help is at hand, however. We are always pleased to hear from prospective new clients, and we are happy to share our experiences. The fewer opportunities fraudsters get, the better for us all!