Couple Loses $12K in Airbnb Scam
October 8, 2019 | Napoli Shkolnik News
Denise and Ian Feltham paid thousands of dollars for a dream vacation rental which did not exist. The law protects victims like these, and that protection often comes from some unexpected places.
The couple responded to an Airbnb ad for a vacation rental in Spain. But the person who posted the ad apparently harvested pictures of condominiums for sale through another outlet.
The rental the Felthams paid for never existed. An Airbnb spokesperson called the event “an anomaly” which “fell below our usual high standards” for vacation rental listings.
“There have been over half a billion guest arrivals on Airbnb to date and, with two million people checking into an Airbnb every single night, issues like this are incredibly rare,” the statement added.
Feltham said Airbnb was “rubbish” and a “faceless organization.”
Deceptive Trade Practices in New York
In the relentless pursuit of profits, businesses often take shortcuts, especially when it comes to product advertisement. Many times, these shortcuts are legal. More often, however, they violate Section 349 of the New York General Business law, which is the main deceptive trade prohibition in the Empire State.
The basic elements of this statute are:
- A materially deceptive act
- Pertaining to a consumer-oriented act or practice
- Which causes injury.
Generally, acts are materially deceptive if they would affect a customer’s purchase choice or actions related to the goods purchased. If a court finds that the defendant knowingly violated Section 349, the court may award treble (triple) damages.
Additionally, plaintiffs must show that the deceptive conduct occurred as part of a pattern or practice. And, that pattern or practice was directed at members of the general public.
Section 349 claims are often rather straightforward, and they often settle quickly. Most businesses are eager to avoid the negative publicity of a deceptive trade practices lawsuit.
However, this law is also limited. It only applies to merchants who sell goods. It does not apply to individuals who rent services, such as vacation rentals.
Nevertheless, there is an old saying in the law that where there is a wrong, there is a remedy. That principle is not always true, but it is usually valid. An attorney just needs to know how to properly connect the dots.
Section 350 is the other New York deceptive trade practices law. This provision usually applies in deceptive labeling claims.
Third Party Liability in Fraud Claims
In 2018, federal lawmakers approved the Fight Online Sex Trafficking Act. What on earth does this law have to do with deceptive commercial practices, like the aforementioned Airbnb loss? We’re getting to that.
At the time, the American Civil Liberties Union objected to FOSTA, because the broadly worded bill may have some unintended consequences.
The ACLU was correct on this point. And in this case, online scam victims may benefit.
For many years, Craigslist, Reddit, Backpage, and a number of other classified publications routinely published advertisements which blatantly advertised prostitution and other illegal activities.
But these companies were never held liable for resulting injuries. Their defense? We only publish ads. We do not have any control over the content.
FOSTA eliminated that legal loophole. In fact, before President Trump even signed the bill, Craigslist dropped its classified section because legal immunity would no longer be available.
This company, and others like it, including Airbnb, would be legally responsible if published advertisements violated the law.
As mentioned, the deceptive trade practices law only applies in certain situations. But the fraud prohibition applies to everyone. Essentially, fraud is:
- A material misstatement
- Of a current fact
- Which is designed to induce a certain activity.
So, according to basic negligence law and the FOSTA change, Airbnb is arguably responsible if people lose money due to a poster’s fraudulent activity.
This responsibility is not just limited to the cost of the service itself. Damages in negligence cases also include compensation for other economic losses, such as lost wages, and noneconomic losses, such as emotional distress.
Additional punitive damages may be available as well, in some extreme cases.
Fraud and deceptive trade victims may be entitled to substantial compensation.
For a free consultation with an experienced personal injury attorney in New York, contact Napoli Shkolnik PLLC. Our main office is conveniently located near the Empire State Building.
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