Feb 19, 2024 06:00:00

It has been pointed out that fraud using ``arbitrage'', which is prohibited by the terms of service, is rampant on Airbnb

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Airbnb , a hotel reservation service, prohibits ' arbitrage ' in its terms of service and community policy , in which a third party books a hotel or accommodation, adds a fee, and then lists it. Despite this, it has been pointed out that arbitrage is rampant on Airbnb, and associated fraud has occurred.

Investors in Airbnb arbitrage business allege they were defrauded
https://www.cnbc.com/2024/02/11/investors-in-airbnb-arbitrage-business-allege-they-were-defrauded.html

A company called

Hands-Free Automation (HFA), headed by Anthony Agyeman, creates listings from hotel booking sites and short-term home rental sites, relists them on Airbnb at a higher price, and sells them for the difference. He was engaged in a business called ``arbitrage'' where he made a profit.

HFA solicits funds from consumers to conduct business, and the amount ranges from $20,000 (about 3 million yen) to $30,000 (about 4.5 million yen). HFA told investors, ``We have five-year exclusive agreements with thousands of property owners, and we have permission to relist their properties on Airbnb at a higher price.'' The return on capital is guaranteed within six months, after which you can earn pure profit.''

Darin Carr, a New York resident, invested in HFA using his mother's estate, who passed away in 2020, at the recommendation of an HFA sales representative. The total amount amounted to $ 19,497 (about 2.93 million yen). However, Mr. Kerr never received a return from HFA.

Mr. Kerr, along with 11 others who also invested in HFA, filed suit against HFA. Mr. Kerr and other plaintiffs argued that ``HFA not only falsely claims that it has a contract with the property owner, but also that HFA's services violate Airbnb's terms of service in the first place.''

Kerr also pointed out that ``the large amount of money invested in HFA may have been used for Mr. Agyeman's living expenses.'' On the other hand, Mr. Agyeman and HFA's lawyer, Thomas Hunker, denied that the client's money was used for anything other than business, saying, ``The client's funds were used to pursue the company's interests.'' I am.

The plaintiff is seeking damages from Mr. Agyman and others for a total of $624,000 (approximately 93 million yen) invested by the plaintiff. Meanwhile, Mr. Agyeman and his colleagues have established a new company called 'Wealthway' and are conducting similar business. Wessel Botes, a former sales employee at Wealthway, reported to overseas media CNBC, ``At Wealthway, we aim to generate monthly sales of more than $3.5 million (approximately 526 million yen).''

Concerning the HFA, there are complaints that ``reservations were not made correctly'' and ``to prevent arbitrage from being discovered, it was required that property listings do not state that the property is a hotel nor specify the name of the hotel.'' It has become clear.

It has also been pointed out that photos of accommodations were posted on Airbnb without the owner's permission. In addition, it has been suggested that Airbnb may have falsified invoices and documents in order to respond to ``checks to confirm ownership of the property.'' Below are photos of Dallas hostel rooms listed on Airbnb without permission.

HFA misrepresentations are a very serious matter because they can make it difficult for Airbnb to respond to emergencies or situations that require the involvement of a safety team. Airbnb told CNBC that it plans to introduce a strong authentication process in the United States and other countries as early as 2024.

Airbnb also stated, ``There is no business relationship between Airbnb and Mr. Agyeman. Aribnb has suspended multiple accounts related to Mr. Agyeman and HFA and has taken steps to reduce the business of Mr. Agyeman and others.'' ” he said.

Airbnb reports in its annual report that 'fraud perpetrators use complex and constantly evolving tactics on the platform to create fake guest and host accounts to commit fraud.' doing.

Technology companies with marketplaces like Airbnb use AI and other technologies to monitor vendors and customers for fraud and other fraudulent activity. However, Amazon's (PDF file) financial report shows that it is difficult to respond to all fraudulent acts.

The US Federal Trade Commission (FTC) and the US Department of Justice (DOJ) are jointly cracking down on HFA-like companies that promise profits and success but fail to deliver returns.