For her bachelorette party, Casey Milovanovich booked a home in Austin through Vacation Rental By Owner, (VRBO), a site that can be easily confused with its more popular competitor AirBnB.
Both websites boast millions of home rentals to browse, look the same, and act as the trustworthy middle-man between renter and property owner--what VRBO advertises as its “Book with Confidence Guarantee.” But when problems with their reservations arise, customers are finding that VRBO’s services are not what they seem.
As Milovanovich and her friends arrived at the house in Austin, they saw that the property’s owner, a man, was waiting for them at the door. He chugged alcohol from the freezer while they settled in, and then left. The whole experience was odd, but the women tried to forget it.
Then, without warning, he suddenly burst into a bedroom where one woman had planned to crash later that night. He seemed wasted and said he was there to fold towels. They hadn’t realized until then that the man’s own home was directly attached to that bedroom, and their rental.
"We were hoping that they would relocate us, because I had a group of like 10 girls that were just freaking out and didn't feel safe,” Milovanovich tells ConsumerAffairs.
She called VRBO. "They didn't offer anything, they were like, it's part of the fine print. Basically, that it's your responsibility to do your research on the home. We're just a hosting website, we're nothing else."
It’s just one of numerous VRBO horror-stories, shared by renters in interviews with ConsumerAffairs or in dismal reviews surfacing online.
VRBO tells ConsumerAffairs that it takes reports about personal safety “very seriously and will take appropriate action.” But when it comes to financial disputes, customers describe getting the same response from VRBO--that nothing is VRBO’s responsibility.
VRBO vs. AirBnB
VRBO and its parent company HomeAway began as simple, high-end home rental advertising sites in the early 2000s. Expedia bought the brands in 2015 in an attempt to chase after AirBnB’s customers, many of whom were looking for something cheaper than a hotel, even if it meant sharing a home with a stranger.
Expedia’s former CEO closed a significant gap, reporting last year that it had amassed 12 percent of the short-term home rental market, trailing behind AirBnB’s 15 percent.
“Vacation rentals are at the very early stages of being wired up on a global basis,” then-CEO Dara Khosrowshahi (now at Uber) told the Wall Street Journal.
But the fundamental problem, explains Annie Switzer, a former HomeAway advertiser, is that VRBO does not actually offer any of the renter-friendly services that have made AirBnB so popular--namely, controlling all financial transactions, verifying the identities of people who use the site and providing renters with last-minute listings and flexible cancellation policies.
HomeAway never pretended to offer such protections either. It was just an advertising service--until Expedia took over.
"There's some underlying things... that make it impossible for them to be like AirBnB,” she says, yet Expedia is presenting its venture as an AirBnB alternative anyway, complete with flexible-looking cancellation policies and an in-application payment platform and messaging system.
"There are a lot of scenarios on AirBnB where you [as a customer] can get all your money back,” says Switzer. “That is not so on Homeaway.”
Switzer, who owns three vacation rentals on the coast of Virginia and Delaware, had relied on HomeAway’s advertising service for years to support her business until the 2015 Expedia takeover seemed to cause a dip in prospective renters. Now she runs a Facebook page for HomeAway subscribers to voice their numerous issues.
But she’s not switching over to AirBnB. Switzer does not want to be part of the “sharing” economy or run her business on AirBnB’s terms. Switzer wants to do rental business the traditional way--with long-term rental contracts, security deposits, and strict cancellation policies. She just wants the old version of HomeAway back.
The “Refundable” trip that cost a grand
Vinit Samel had planned to spend his Christmas in Big Bear with five other families. He used his credit card to reserve a house for 14 adults and 9 children through the VRBO platform. Then a family backed out, and he canceled the online reservation, expecting an immediate refund in return.
“Bookings canceled at least 60 days before the start of the stay will receive a 100% refund,” is all the listing’s cancellation policy says. Samel canceled on October 16, well before that 60-day time frame.
The homeowner in Big Bear wouldn’t budge. In a text, he explained he was keeping $995 as a cancellation fee. His text provided little clarity as to why. “Most people don’t cancel. So it’s a none [sic] issue,” it said.
When Samel called VRBO back, he was told that the company would also be holding onto an additional $334 service fee because the property owner was keeping a $995 cancellation fee.
In an interview, VRBO’s spokesman Christina Song initially defended the charges, saying that the property’s rental contract did not promise a full refund. But the listing’s public “Cancellation Policy,” boasting a 100% refund upon cancellation, makes no reference to that.
After ConsumerAffairs pointed this out, VRBO changed course and said they had made a rare mistake. "We do agree that it is a confusing experience to have two different cancellation policies, even though those are actually completely decided by the property owner,” Song tells ConsumerAffairs, adding that VRBO would refund Samel both fees.
VRBO now encourages renters to pay for homes using the VRBO website. But renters fighting what they describe as fraudulent credit card charges have discovered that VRBO’s “secure” in-house payment system is actually outsourced to a different company, a California-based firm that goes by the name Vacation Rent Payment.
One traveler told ConsumerAffairs that she was incorrectly billed four times by a property owner who never even accepted her request to vacation in their home. When she reported an issue, a VRBO representative declined to help, telling her in an email that “we do have to direct you to the payment processor Vacation Rent Payment for more incite [sic] on why the funds have not been released.”
Property owners, in turn, say in online reviews that Vacation Rent Payment will “back-charge” them if renters book their homes using incorrect credit card information; one former VRBO advertiser tells Consumer Affairs that he was back-charged over $8,000.
Vacation Rent Payment tells ConsumerAffairs that, generally, property owners have the right to dispute charges with their credit card company, and that Vacation Rent Payment can then act as an intermediary in the process."When this happens, we inform the property owner of the chargeback by email, along with details of the dispute (if we have them), and offer to assist the property owner with disputing the chargeback," Vacation Rent Payment spokesperson Molly St. Louis says via email.
However, "the Terms and Conditions that a property owner agrees to when signing up for our service state that property owners will be liable for any amount associated with a chargeback," St. Louis writes, "and authorize us to recapture charged back funds from the property owner (who, of course, is the merchant/service provider to the cardholder or the person who used the credit card)."
Christina Song says that Vacation Rent Payment is a trusted partner that processes billions of dollars each year. “Like any online industry, chargebacks do happen, but there are ways vacation rental owners can protect themselves,” she tells ConsumerAffairs.
VRBO’s Help page makes clear that they take limited responsibility for its renters and advertisers. Like CraigsList, they advise customers to never pay cash or wire money to a stranger and to be on the lookout for fraudulent ads.
But unlike Craigslist, which is free, VRBO charges hefty “service fees” to homeowners and users, ranging from five to 12 percent of a booking price, but the fee can also range “above or below” that, the company’s website says. In essence, the service fee is whatever VRBO wants it to be, and the company cannot explain any particular benefits that the customer receives in exchange.
"The service fee isn't something that is specifically funding one aspect or another of the way that bookings are protected,” Song says. She adds that some of the money is reinvested to look for fraudulent listings.
"It's not a direct funding. But in some ways, for the traveler, they are related, since booking on the site automatically means you get that ‘Booking with Confidence’ guarantee." Whatever that means.