I-Prac property verification: Protecting travellers from rental fraud
When renting a holiday property, how do you know if what you're looking at is really what you'll get? I-PRAC has found a way.
Now that travel is back on, holiday booking sites are flooded with properties promising the getaway of your dreams. But before you wire transfer a large deposit, you should make sure the property is for real.
The south of France is rife with rental fraud, scamming innumerable people out of millions over the last few years. Started in Cannes, I-PRAC uses sophisticated technology to certify property and protect renters from getting stranded. In our Jan/Mar issue, RI spoke with the founder, Chris Maughan about the story that started it all...
“How could you be so stupid?” barked the husband to the wife, in tears. An hour earlier, the couple was stranded on the side of the road with their three kids, multiple suitcases and a £15,000 villa in Super Cannes paid for - but didn’t exist.
Rental fraud has long been flourishing behind the scenes, leaving couples, families and even large companies cheated out of their money, stranded in a foreign land and feeling “stupid.” Police can rarely do much, as all they have are bogus receipts, fake names and numbers that have already been changed. Even travel insurance doesn’t help. “Holiday insurance rarely covers fraud,” explains Chris, “the fine print will say this.”
For the family who booked the villa, everything looked good - even Chris found their paperwork very convincing. But, he adds, even £15,000 for a luxury villa in Cannes is too good of a price. After getting the family situated in a new villa, he assured it wasn’t just them and they weren’t stupid - they were scammed by a sophisticated group and it happens to people and businesses all over the world.
“Something had to be done.”
Chris Maughan is the CEO of AES Events and Accommodation agency for individuals and large companies. During the big festivals in Cannes, companies like Twitter and Google trust him to book their accommodations. But many times, clients find AES after getting burned. For years, he fielded calls from people scammed and stranded, especially during big festivals. There was no accountability, no verification process, no recourse.
“It’s like the wild west!," Chis exclaims. "And the industry just accepts it.” For Chris, this scammed family was the last straw. “Something had to be done.” He realised that he operated his agency on trust because he was trustworthy: “But anyone could say that!”
He set out researching these sophisticated but fake websites and the tricks and tools they use to fool people. What he found was frightening:
“These fraudsters operate like companies. So they will have a CEO, a marketing department, web development, they just don’t pay anyone once they receive the money.” So their marketing people will do research and say, ‘the Cannes Film Festival is a great market for us.’ And the CEO says, tell me more about – ok, get a website up and get 50 properties on it targeted for the festival and get the bank accounts set up. So there might be an office of like 20 – 30 people. Often they will use interlinked phone numbers, so a UK number will get redirected to Turkey, for example. All part of a sophisticated fraudulent business. They are always thinking ahead. They are setting up a new site right now, as we speak, ready to scam and there will be 1.5 million in fraud just in St Tropez.”
Creating a solution
I-PRAC was formed to catch all of those details before verifying a property, using their own sophisticated technology, especially photo recognition to verify if there are other photos online of the property. “We check all of it, including passports, bank RIB, ownership documents, contracts with government agencies, electricity bills, etc. It takes two to three weeks to verify each property,” Chris reveals.
When approved, a property gets an I-PRAC logo. But, as Chris points out, that’s a risk as well: “we have to be careful because fraudsters can just copy a simple logo on their fake site.” So every IPRAC member’s logo is uniquely generated with the ID number in the logo design and that ID number can be entered on their website, bringing you directly to that profile, showing the email address, the last five digits of the bank account and the phone number. It also has photos of the property and verified reviews of actual customers. “If you book through an IPRAC property, you’re cool. You know that when you arrive, you’re not going to be a victim of fraud.”
So what about online booking platforms that ‘verify’ their properties? “They don’t verify a property,” Chris says. The only verification on these sites is replying to an email. “We could post a listing on Airbnb right now and be renting it by 3 pm this afternoon. That’s wrong.”
It’s not just assurance for the customer-owners who have a mortgage to pay also need assurance. “When you book through Airbnb, the customer pays but the funds are held by Airbnb until the guests arrive. If you’ve got the summer months booked six months in advance, you don’t get a dime until the summer.” These platforms aren’t an assurance for either party. I-Prac has verified around 70,000 properties in over 28 countries and rapidly growing. They are working to improve consumer confidence and disrupt the industry.
Responding to a damaged industry
The devastation of the worldwide Covid lockdown has been disastrous for the industry. In response, Chris decided to give back: First, he waived I-PRAC fees for the year with a gradual 4-year return to full price. Second, he started lectures to educate members on how to adapt. “The rental market is a whole new landscape,” he says. Cancellation policy and trust are the top: “If you don’t showcase trust in 2021, you’ll lose business.” So far, I-PRAC has gifted over £3 million of membership fees and gained over 8,000 new members. Chris’ biggest hope is a quick recovery, to see Cannes return as a congress centre and to have a more trustworthy rental market.
- Nicole Ruskell