phishing
3 years ago
 

HomeAway on phishing, peers and professional managers

The vacation rental industry has truly gone international — “international criminals” are directing phishing scams at owners and renters, says HomeAway CEO Brian Sharples.

During the company’s first quarter 2012 earnings call yesterday, Sharples estimated that phishing scams related to identity theft will impact about $1 million worth of HomeAway’s transactions in 2012. That comes to less than .1% of transactions, he says.

Vacation rental owners are particularly vulnerable to phishing scams because they generally use personal email accounts such as those from Gmail, Yahoo Mail, Hotmail and Windows Live, Sharples says, adding that HomeAway has increased its owner education efforts to combat the threat.

In addition, although HomeAway’s Carefree Rental Guarantee  does not mention “phishing,” its Internet fraud section has been revised to provide protections in instances where payments have been made to someone other than the owner when the owner’s email account has been compromised.

Sharples also says that HomeAway is in the process of changing the way customers and owners interact on the site to counteract phishing attempts, although the development project won’t be complete until later this year.

HomeAway is concerned about the social impact of phishing, too. Sharples noted that customers “have potential to get pretty upset” when they fall prey to these scams and spread the word to their friends.

Noting that the behind the scenes efforts to better fight the phishing scams may not be in place until later in 2012, Sharples said he hopes in the long-term that the impact gets “a lot more muted.”

In other developments, Sharples indicated that TripAdvisor, which he characterized as HomeAway’s biggest direct competitor, is utilizing aggressive pricing policies in the UK, which hurt a bit there, but can’t be implemented globally.

Sharples revealed that HomeAway added about 60,000 vacation rental listings in the first quarter, bring its total to 699,088 listings through the end of March, while TripAdvisor added just 9,600.

Sharples continues to argue that peer to peer short-term rental site Airbnb is a “pretty different business” than HomeAway’s and “there is hardly any overlap” in traffic because the two companies’ customer bases are “very different.”

HomeAway took a new look at this question over the past few months.

Still, Sharples says HomeAway added 60,000 paid listings in the first quarter while Airbnb added 33,000.

“We have momentum,” Sharples said.

Addressing the mix of paid vacation rental listings from professional managers and owners on HomeAway, officials stated that professionally managed properties on HomeAway sites now make up about 27% of paid listings, up from about 22% or 23% in the first quarter of 2011.

Sharples said HomeAway would like to increase its percentage of professionally managed properties to about 40%, which he says is their representation in the market.

However, Sharples conceded that that professionally managed properties bring less SEO (search engine optimization) benefit than vacation rental owner listings because professional vacation rental managers generally advertise in multiple places.

For the first quarter, HomeAway’s net income attributable to common stockholders was $2.4 million compared with a net loss of $7.5 million in the first quarter of 2011.

And, revenue in the first quarter of 2012 increased 23.4% year over year to $64.1 million, driven by renewal rate strength, increases in paid listings and other revenue, the company says.

Average revenue per listing declined 1.8% to $322.

Note: Image courtesy of Shutterstock.

 
 
Dennis Schaal

About the Writer :: Dennis Schaal

Dennis Schaal was North American editor for Tnooz.

 

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  1. Kathryn Bowden

    In Febuary 2012 I was a victim of “phishing/hacking/scamming” while searching for a vacation rental property on HomeAway.com. I lost $3800. To this day, HomeAway has not proven to me or any other victim I know that their own site was not hacked. The owner I rented from has multiple properties and advertised on several sites, including his own website for the past 10 years. In Feb., myself and 3 other people during the course of one week, were scammed in attempting to rent one of his properties. Only HomeAway was used by the victims in their search. No victims were found among the people who contacted the owner through other sites, including his own. Only one email address was used for all advertisements, so if the owner’s email was hacked (as claimed by HomeAway), there should have been victims who accessed his ad from the other sites.
    I can understand HomeAway not admitting the possibility that their site was hacked. But that will not prevent the lawsuits that will follow both from the victims, and the owners who have been directed to make restitution to the victims by HomeAway. Deny, deny and deny.
    Never mind what HomeAway calls the “social impact”, they should be more concerned about the impact that the law suits that are imminent.
    I have been in touch with many fellow victims. Not one believes that HomeAway was not hacked, and continues to be hacked. Several believe it is an inside job. Law enforcement in UK are at work tracking down the culprits through the bank accounts we have wire transferred money to. And when these thieves are apprehended, and detectives interview them, I believe we will discover that they hacked HomeAway and VRBO.
    The so called “carefree rental guarantee” that HomeAway is so proud of, did add phishing to its “protection”, though several of the victims who purchased the insurance, discovered when they made a claim against it, that it did not cover all properties on their site. HomeAway conveniently dropped those properties that victims had been scammed trying to rent from the covered properties. Victims were told that as those properties were not covered by the guarantee (though HomeAway accepted their money to purchase the insurance) they could not use it to seek restitution, but must instead demand it of the owner of the property.
    Nuff said.

     
    • Andy

      Hi Kathryn,
      Sorry to hear of your problems. I know it must have been shocking for you. I have emailed you privately about this issue.

      It is high time this was brought out into the open by a large press publication and the sites responsible for it made to publicly say what they are doing about it. I think the model of list and leave is fundamentally flawed and it is this that is causing these frauds. Be it via phishing or totally fraudulent and bogus properties being uploaded.

       
      • Jen

        Andy,

        I was also defrauded by a phisher through Homeaway.

        I find this comment by the CEO to be bizarre: “phishing scams related to identity theft will impact about $1 million worth of HomeAway’s transactions in 2012.”

        How do they measure “impact”? The way the scam works, a phisher will intercept email communications between the owner and potential renter and start emailing the potential renter representing him/herself as the owner. The obvious impact occurs when the phisher successfully gets the renter to wire money. But what about all the lost rental income that happens, unbeknownst to the owner OR Homeaway , when the phisher starts to communicate and does a relatively poor job of representing the property and answering questions and the renter opts for another property? As a victim, I can tell you that the responses from the phisher were very succinct. Had I been looking for a longer-term rental, I would have not chosen this property because the “owner” seemed hurried and not very helpful.

        Furthermore, for every one successful phishing attempt, how many vacationers have unwittingly shared their vacation dates and price range with a criminal? Homeaway has been aware of this problem since the fall. Do investors see any risk that Homeaway may have third party liability if vacation information is marketed and homes are burglarized as a result?

        You are spot on in saying that “list and leave” is fundamentally flawed. Why would anyone list a property using this site when the risk of loss is so high? An owner is exposed to (1) lost rental income if a phisher is “losing” their leads, (2) lost rental income if a phisher succeeds in closing the deal and (3) lost rental income when they are told by Homeaway that they must compensate the victim because they are 100% liable for the fraud. Why would anyone send an inquiry through Homeaway if they thought there was any possibility that they could be sharing their vacation dates with a criminal just by using this “secure” form?

         
        • Alan Lane

          Hi Jen – I would love to get your thoughts on our solution to phishing as well as simply adding a layer of trust into these “site unseen” rentals. We are a neutral party that receives the payment from the traveler and holds it in a trust account until they arrive on vacation. We release the money to the owner the day after the rental starts.

          A phisher obviously wants the payment sent directly to them so our service creates a barrier they can not work around. Please take a look at our website at http://www.depositguard.com. I would love to get your thoughts.

          Best,

          Alan

           
        • Andy

          Hi Jen,

          I agree wholeheartedly with your points. The problem is they are backed by huge resource to secure the top positions across Google and because of that genuine owners flock to them to secure bookings. The intent of their CEO is to move the entire industry to book online. As and when this happens it may become more secure because Homeaway will then be involved in the transaction and will have a damn site more liability.

          However, I agree with your sentiment regarding third party liability. A class action by all those scammed would be successful I think. Not necessarily in the courts. I think they’d pay up before they got any seriously bad press.

          I’d welcome contact for you as I am collecting details from those affected by this to drive change in the UK. It’s a long road and the more that join in the more chance we have of making significant change.

          Regards

          Andy

           
  2. HomeAway on phishing, peers and professional managers « Austin Short Term Rentals

    […] an article by Dennis Schaal from tnooz.com that describes how “international criminals” are using […]

     
  3. HomeAway, Inc. Reports First Quarter 2012 Financial Results | Vacation Home

    […] Sharples. During the company's first quarter 2012 earnings call yesterday, … Read more on Tnooz Tags: 2012, Financial, First, Homeaway, Inc., Quarter, Reports, Results Posted under Homeaway […]

     
  4. Tony

    Airbnb may well get there in the end but in our neighborhood at least, everyone is listed with both currently. Why wouldn’t you be when there is no outlay on the Airbnb listing? I therefore think the crossover in clients is potentially massive.

    That said Homeaway converts 10 times more than the Airbnb listing in my random sample of 1. Homeaway drive 3-4 inquiries a week. Airbnb about 1-2 a month. The clientele we get from Homeaway are almost always people between 25-45. For us therefore, the older people renting to older people theory doesn’t hold any weight.

    As soon as Airbnb can fill our place the way Homeaway does, we might consider leaving Homeaway but from where I sit, that currently seems like a long way off. Conversely if Airbnb put an upfront charge for their listing right now, then you would see some serious drop off at their end.

     
  5. Andy

    Only passing comment on the issue of fraud. Seems to me this is growing and the likes of HA need to be very tuned in to it. The scandal earlier this year on Airbnb when the apartment was trashed went viral. Any savvy consumer that gets stung and goes viral with it will hurt the likes of HA and the wider rental industry as a whole.

    It’s coming and the big guys don’t seem to fussed about it.

    It’s time to book via card and have the central repository hold the money until the customer is in the accom. Scammers can’t scam if they don’t get paid until the guest has arrived.

    I also find it shocking a company the size of HA can’t implement an internal comms system before the back end of 2012. It aint that hard to bring this in-house.

    Andy

     
    • Alan Lane

      @andy – I could not agree with you more about holding the money until the vacationer arrives. That’s a niche in the market that we are filling and our business is really taking off. It’s good for vacationers, homeowners and really the entire industry. Give me some feedback on our model when you get a chance. http://www.depositguard.com

      Alan

       
  6. Mark Goldberg

    Airbnb has major overlap in the owner-direct market in our market (Hawaii.) I would imagine that extends further than just HI… I don’t think HA has to worry about professional mangers listing on Airbnb, but since that is only 1/4 of their customer base, they’re likely minimizing it for public perception. They couldn’t possibly be clueless of the threat?

     
  7. Dennis Schaal

    Dennis Schaal

    Sean: Despite HomeAway’s rhetoric to the contrary, I do indeed think the company is concerned about Airbnb. Sharples indicated that HomeAway looked at the traffic overlap questions AGAIN over the last few months. Prudent steps, of course. But, if HomeAway, wasn’t wary of of Airbnb, then why bother?:)

     
    • Sean

      Good Call Dennis.

      These investor calls for Public Companies have a lot of this sort of stuff. Make it all seem fine and dandy! So people keep buying and holding the stock! I don’t blame him (Sharples) for his take – but the savvy folks here on Tnooz know better!

       
  8. Sean

    “Sharples continues to argue that peer to peer short-term rental site Airbnb is a “pretty different business” than HomeAway’s and “there is hardly any overlap” in traffic because the two companies’ customer bases are “very different.””

    Sure – maybe right now it is…but if I were HomeAway – I’d be wary. They could be a massive competitor and eat Homeaway for breakfast in the near future.

     
 
 

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