How to Protect Your Good Name: Vacation Rental Transactions
Safeguard your renters and your reputation by avoiding unsafe payment methods.
Once you have spent valuable time conversing with your renters, sold them on the great things about your home, and convinced them to book your property, you should protect their interests, as well as your own, by asking for a payment method that is safe for both you and your renters.
Don't throw up a red flag!
If you ask your renters to pay via a wire transfer service (like Western Union) you may be throwing up a red flag. HomeAway, like other responsible online marketplace websites, advises customers to never send payment by an untraceable wire. This payment method is easily exploited by thieves, and is unsuited to a transaction as significant as the rental of your vacation home.
Do not ask your renters to send payments via wire transfer services. And I'll say it again—Do not ask your renters to send payments via wire transfer! If Western Union cautions customers against using their own Western Union services for Internet transactions, tells you something. Just read the “What can I do to protect myself?” On this page of Western Union's website: http://www.westernunion.com/info/faqSecurity.asp .
For your protection, don't ask for certified checks.
In recent years, certified checks have lost favor with banks due the ease of their reproduction by counterfeiters.
Most owners have already heard about what's been dubbed the “Nigerian Scam” in which a prospective renter sends a certified check for more than the agreed upon rate. Well guess which payment method they use? Certified checks. That's counterfeit certified checks, and let me say, I have seen them and even bank managers cannot tell these are counterfeit. With the typical Nigerian Scam, owners deposit the check and then the “renter (AKA Scammer)” asks for an immediate refund, or worse yet, they write a check for an amount greater than the balance owed and would like you to mail back the difference. Unfortunately, by the time bank discovers the counterfeit certified check, it's too late—you have already sent the refund amount and there is no recourse.
If a renter wants to pay with a certified check, first of all, say “no,” and then take a second look at their rental application. Are there many misspellings or typos? Do they use a free email service, such as Yahoo or Hotmail? Do they want to pay in full now for a far off rental date? Is the provided phone number disconnected or a wrong number? These are just a few indicators that the renter may not be legitimate.
If you suspect a scam, report it to the Internet Crime Complaint Center, http://www.ic3.gov.
Preferred/Safest Payment Methods
Credit cards are by far the safest method for both you and your renters. They are immediate, convenient, traceable, and have limited liability since most credit card companies offer some level of identity and purchase protection.
PayPal is a fast and convenient online payment service. People like the convenience of this service since money is transferred automatically over the Internet, directly from their credit card or personal checking account. This service does require you to open up your own account, but the process is quite simple.
Personal Checks are traceable to a particular mailing address, provide proof of payment. Also most banks offer a stop payment service if problems arise before the check or payment is cashed. Just make sure you receive the check two weeks prior to the rental date to allow time for the check to clear your bank.
Less Recommended Payment Methods
Bank-to-Bank Wire Transfers offer direct payment from one recognized bank account to another account. Payment is immediate and convenient and money is deposited directly into the seller's account (note: Bank-to-Bank Wire Transfers are different than Western Union because they are traceable to an individual).
Money Orders are traceable to a particular mailing address, and provide proof of payment. Some services offer the option to stop payment if problems arise before the payment is cashed, but not all, so be sure to check with the service before accepting a money order as payment.
Not Recommended Payment Methods
Instant Cash Wire Transfer such as Western Union are just not safe for you or your guests. Don't use them.
Certified Checks are easily faked by counterfeiters and rarely used anymore in legitimate business. Don't use them.
Cashiers Checks are another favorite of counterfeiters. Don't use them.
© Christine Karpinski 2006
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