Morairaway Scandal – Time for a bonding product ?

The Morairaway villa fraud in Spain

Police in Spain are investigating the case of Morairaway.com – a fraudulent villa rental company which advertised and took bookings for high end villas in Moraira, Javea about 80km north of Alicante. It seems many families from all over Europe have paid thousands of Euros for bookings with Moraira – for villas that have never even existed. The website has been taken down and there is now no way to get in contact with the “owners”. It seems as if the fraudsters used leading holiday home rental sites including holidaylettings.co.uk and holiday-rentals.co.uk to get initial leads for their properties and sent out receipts and booking confirmations containing arrival information.

What can people affected by the Morairaway.com fraud do now ?

Those that have booked with holiday-rentals may be covered by a rental guarantee which covers travellers for up to £3300 / €4000 that they may have paid to Morairaway or other fraudulent rental advertisers but not for flights, car-hire etc. To be eligible customers must have registered their booking for the scheme before they sent payment and they must have sent payment by credit card, PayPal, cheque or direct bank transfer.

People that have not booked through holiday-rentals or are not eligible for the guarantee should check with their banks / credit-card companies / paypal to see if they can reclaim any payments made to Morairaway. Customers should also seek alternative accommodation. Thanks to the publicity on this case I hope that some holiday companies will be offering deals for affected holidaymakers. We shall see.

The police station in Denia, from where the crime is being investigated can be reached on (00 34) 9 6578 3851

Questions raised by the Morairaway Case

How many more of these cases will come to light in the future, and on what scale ? Sad to say, but will there be copy cat crimes thanks to the publicity of this case ?

Is it time for the holiday home rental industry to develop an industry wide consumer protection system such as the rules governing package holidays (ATOL) and the leading bonding system for travel agencies (ABTA) ?


June 24, 2009

Q&A

27 responses to “Morairaway Scandal – Time for a bonding product ?”

  1. Kevin Davies says:

    I was responsible for booking a holiday for myself and 8 others, mix of friends and family to a Morairaway villa. First saw the news on teletext and haven’t stopped shaking since. Seems like that’s almost €2000 down the tubes plus all the flights and cars we have booked. Still don’t know if we are going to abandon the trip or find another villa. What a mess, I feel so stupid.

  2. Schofields says:

    “Is it time for the holiday home rental industry to develop an industry wide consumer protection system such as the rules governing package holidays (ATOL) and the leading bonding system for travel agencies (ABTA)?”

    I think it is.

    Although paying by credit card offers some protection against fraud, a lot of private renters still take cheque, bank transfer as a primary payment method which scammers can exploit.

    Should the holiday rental portals have a responsibility for checking out fraudulent advertisers?

  3. Andy says:

    I urge all genuine owners to realise that list and leave websites are your downfall. Owners flock to them to market their villas with little thought to the consequences when something like this happens. There are lots and lots of sites out there that will deal with you as individuals but due to the massive take up of list and leave sites the smaller ones, who frequently offer better functionality and services to you, get left fighting for the scraps. Holiday-lettings and holiday-rentals have both been caught napping by this. Consumers will penalise our industry if owners cannot realise they need to do two things.
    1. Get with the 21st century and offer live bookings online paid for with a credit card. The days of cheques went out with the ark.
    2. Spread your advertising evenly and do not be drawn in to the list and leave sites purely because they are the biggest. A simple equation is, 100,000 visitors divided by 25000 villas is 4 each! Go with a site that can offer you credit card payment services with full ecommerce back up. You can pass this credibility to your customers and let them do the decision making.

    We little guys are trying to offer you a service but you canot see beyond the big sites and it is affecting you all. More competition not less, do not create two or three big sites because if you do their prices will go up and up and up.

  4. Mike King says:

    I am a licensed rental agent in Moraira and have been following this “Bonding” issue with interest because something obviously has to be done. Morairaway was a large-scale deliberate fraud. I also know of others where just a single villa was involved and there are likely to be a lot more.
    Advising clients to always pay by credit card is not really a solution because the majority of private villa owners are simply unable to offer this facility.
    There is in fact a solution at hand that would help to protect direct booking holidaymakers and, at the same time, make it much easier for holiday rental websites to check the identity of the advertiser and authenticity of the property, at least as far as Moraira and the Costa Blanca is concerned.
    The Valencia Agency for Tourism have amendments “on the table” to the tourist rental regulations.
    Once this passes into law all properties for lettings that are commercialised (i.e. advertised for a rental) have to be inscribed in a registry – and the details published on the ad. – online or elsewhere!
    Due to the fact that the owner (or owners licensed agent) would be correctly inscribed in the registry, together with the valid address of the property, it would be very simple for the advertising website or even the client to check the registry.

  5. TheLuxPod says:

    Unfortunately, I didn’t see the website. But I know in London there have been/are scams also. The holiday maker needs to be very vigilant and to ask a lot of questions of the provider. Usually through dialogue one can suss out whether they are legit or not. I often have 20 plus e-mails with people renting from me and I encourage it! Because I get to know who is staying at my properties before they arrive and they have confidence in me. Keven Davies don’t feel so bad. Treat it as a lesson. Scammers are professionals and so one needs to have a lot of dialogue with them. I got scammed outside my own home recently – because i was in too much of a rush to tease out the truth from fiction. Have a good holiday!

  6. Harnek Singh says:

    i have booked a villa in Puerto Banus, through a company called Bennett Property Management in Marbella, i paid the full balance via BACS on Thurday-09/07/09 to an account in the uk, this was to an individual, i did question the company about this and they said this was their uk agent.
    Has anybody heard or booked through this company? Is this a scam ? Help would be appreciated. Thanks.
    Sorry to hear about all those people that have had their holidays ruined.

  7. We agree that it is time to develop industry wide consumer protection and would support any move to create this as the risk of not getting what you expected when you arrive at your destination was one of the drivers for our creation.
    Helene Coxhead
    Your Holiday Matters

  8. Colin says:

    I’d have thought that it would be difficult to set up a bonding scheme, as there are so loads private individuals renting out their own properties. Many of these owners create their own little websites rather than use portals such as holidaylettings.

  9. Thomas says:

    As an individual owner I not only feel for holidaymakers like Kevin who got caught in this scam, but also for fellow owners like myself who may very suffer because of scams like this. For the reasons Andy suggests, and for convenience for myself, I accept credit card payments. I have reviews on at least three different reputable sites. But the reasons owners like myself are drawn to the bigger sites, and not the smaller sites Andy represents, is purely because the bigger sites get more traffic, deliver more enquiries and mostly more bookings. When smaller independent sites bring more enquiries, more owners will list with them. The only way you can do that Andy is to spend more time and money on SEO.

  10. Mike King says:

    I noted with interest that Thomas (an individual villa owner) was able to offer a credit card facility to his clients.
    I did not think that this was possible but perhaps Thomas gets the facility via a 3rd party and not directly, perhaps via an advertising website.
    This is obviously a very definite and positive solution because the client gets an unconditional guarantee (as long as the deal is more than £100 and less than £3,000).
    Imagine, if that were possible? Villa rental, flights and hire-car all purchased with a CC!
    Thomas: Would you care to comment on this?

    Thomas also makes some valid comments about the numbers of enquiries and SEO spend. However, some of the smaller sites are very cheap, or even free.

  11. TheLuxPod says:

    If Kevin Davies sees this post I would like to donate to him and his friends a week’s accommodation at my LuxHighTech apartment in Liepaja, Latvia. It is a beautiful destination on the Baltic Coast, full of warm hearted people. The offer is valid for the remainder of the year. Please contact me via e-mail. The property sleeps 6 and soon the LuxLoft will be available for the remaining members of his family also. He can most likely pick up a cheap flight with Ryanair to Riga. Then he need only be concerned about hiring a car to drive 200km west. Or catch a train, or a bus.

  12. Rob says:

    Wow thanks Judith, I have Kevin’s Email address from his comment so I will let him know. It must be terrible being the one responsible for a booking amongst friends and family when this has happened.

  13. Rob says:

    Hi Schofields, thanks for reading & leaving a comment.
    “Should the holiday rental portals have a responsibility for checking out fraudulent advertisers?”
    My opinion – Clearly they need to do more in order to protect their business if nothing else. I guess they need to find an equilibrium where there isn’t too much bureaucracy but certainly it seems more has to be done.

  14. Rob says:

    Hi Kevin,
    Sorry not to have responded before now & sorry to hear of your misfortune with a morairaway booking. I hope you are working things through and have been able to recover as much as possible. You are not alone.

  15. Rob says:

    @ Mike,
    Interesting news from Costa Blanca there. Thanks for that. A larger scale registry maybe the solution to the holiday home rental scam problem ??, even though it would be a huge undertaking.

    @ Andy,
    Thinking about the travel industry as a whole, the “holiday home rental by owner” sector is one of very few bright sparks in recent times so it’s a shame if confidence will be shaken by scams.

  16. I am an independent owner,with a chalet apartment in the Alps, and have offered online booking and payment using Paypal from the very start. You do not need a Paypal account to book, as there is a facility to pay directly by credit or debit card. Although charges are high, for those of us with low rental income, it is less expensive, and more readily available than a merchant account. Looking at Thomas’s comments above, I agree that the smaller sites re lacking in their SEO. My own website is far more successful. My sympathies to Kevin for being caught up in this.

  17. I agree entirely that holiday rental portals should do more and, like Andy has already said, there are some out there that do. Organisations such as Sawdays, Your Holiday Matters, Travel Eden, and others have an approval process which covers more criteria than just being able to pay for your listing and they make this clear on the websites. These organisations are obviously trying to make a difference. Having said that I think some of the publicity could have mentioned the HomeAway family ( including Holiday Rentals) offer a guarantee up to £3300 in the event of a bogus listing although I suspect that up untill now not many people have bothered to take it up – that will certainly change now.

  18. andy says:

    Hi all,

    Very interesting all the comments coming out. With regard to owners offering CC payments. This is easy, you can do it through my website for as little as 2% and it’s free to list, so you see it is not hard to offer this to customers and I would say it is going to get a lot more necessary with this scam out in the press. Paypal can still be an issue because you have to claim back within 45 days. If you book earlier than this you knackered!

    I have to say, I still find it extraordinary that people are prepared to send cash, bank transfers and checques to what are effectively faceless strangers. Especially the amounts that it costs to go on holiday to a villa.

    I certainly wouldn’t book without a CC these days and I am sure with this bad press around others will think likewise. Sad but true.

    Andy

  19. Schofields says:

    Until any such bonding scheme is developed, it appears that paying by credit card and the homeway rental guarantee, currently offer the most protection. If rental sites offered the facility for owners to take payments, this would be a good start.

    With regards to checking out if an apartment or villa is genuine, these steps might help…
    http://blog.schofields.ltd.uk/416/how-to-check-for-bogus-holiday-rentals/

    It will be interesting to see if any such bonding scheme is developed.

  20. Mike King says:

    REGARDING BONDING SCHEMES
    One problem would be how to implement the scheme another would be how to fund it.
    Most private villa owners offer their properties in good faith, try their best to keep them in good order and arrange services. Most are basically honest and all that is likely to go wrong is that a little “inconvenience” – not total loss!
    Morairway was a deliberate fraud from start to finish, which was only possible because the perperators where able to hide their identity and market inexistant villas.
    I mentioned earlier the registration scheme that is being prepared by the Costa Blanca Tourist Authority and this would prevent most deliberate frauds because both the registrant and the property have to be positively identified.
    The Valencia Agency for Tourism is a government body, funded by the state and there will be no fee to register.
    If all such agencies, in other countries/areas, did the same there would be no need for a bonding scheme as it would be very easy for asvertising websites to check the “bono fides” of the advertisers and their properties.

  21. Mike King says:

    Amazingly it was all happening while we talked about it.
    The Tourist Authority for Valencia has introduced new regulations concerning the renting of tourist establishments, which became effective on 4th July 2009. DECREE 92/2009
    Everything is exactly as I suggested. All tourist properties in Costa Blanca that are “commercialised” have to register AND SHOW THE REGISTRATION DETAILS IN ANY ADVERTISEMENT.
    By commercialised they mean advertised for rental for a price for touristic purposes.
    Providing that the authorities get their act together it is highly unlikely that there will be more morairaway-type scams in the Costa Blanca because every property and it’s owners or those offering it for rental will be clearly identified.
    Here is a good article explaining the new regulations –
    http://moraira-info.com/Articles/Renting-Regulations.htm

  22. Rob says:

    Thanks for keeping us updated Mike. A cynic would suggest that this legislation was designed to make life more difficult for holiday home owners doing private rentals and therefore make life easier for (struggling) hotels in the region which after all are big employers. Unemployment in Spain is something like 20%.

  23. Mike King says:

    Rob, you made a vary valid point there and it is true that the hotelier’s association has lobbied for a change in the law.
    However it is not as simple as that.
    It is true that unelmployment in Spain has reached 20% AND will probably go to 25% before the end of the year but I don’t think that this is about creating jobs for the hotel trade.
    Servicing holiday properties is extremely labour itensive. It takes around 4 girl/hours to clean a 2 bedroom apartment of villa i.e 1 hour per place. Can you imagine how many places a hotel cleaning girl, with her little trolly, gets through in 1 hour?
    So if they want to make more jobs, better that the tourists stay in apartments and villas.
    Holiday home owners have the absolute right to income from their investment and even the hoteliers are not denying them that but what they are saying is that they have the right to a return on investment as well and the competition from villas and apartments is unfair.
    In the first place a hotel has to comply with a whole load of regulations and then they have to pay IVA (VAT) as well as paying social security for their staff.
    They claim that property owners generally have none of these “encumberances” and want to level the playing field.
    Please note that these are not personal opinions, I am just trying to relate the facts as I know them.
    Actually I am a tourist rental agent registered with the toursit authority and earn my living by arranging rentals for villa owners and organising the services. Perhaps I am not totally unbiased but I really can see ifs and buts on both sides.
    This post was actually about the Morairaway scam and my view is anything that prevents this type of fraud is worth considering.

  24. Schofields says:

    Hi Rob,

    Just an update:

    Timesonline has reported that Thames Valley Police have now completed an assessment of the Morairaway.com case and will lead the investigation in the UK.

    They are appealing for victims to make statements. Hopefully justice will catch up with the purpotrators.

  25. Mike King says:

    OK, sooner late than never!
    One thing I am thinking is that people who live here on Costa Blanca may be able to help a lot. I live in Moraira, which is the next town to Calpe.
    Now the fact is that the perpetrators did not use there own name, so they are still here living and socialising amongst us or they have gone and to STAY would be the safest way but they might not have thought of that.
    Therefore the question is: Do you know of anyone, possibly involved in holiday rentals but not necessarily so, who disappeared from the scene around the end of June.
    You never know!
    Mike

  26. Mike King says:

    Two years on from the Morairaway Scam and it seems that I was wrong about the new regulations so I thought that I should put the matter right.
    The fact is that registration is only VOLANTARY, in the Valencia region (including Moraira and the Costa Blanca), for owners of a single holiday property.
    Consequently, as the majority of renters here own one property, the registration system is ineffective as far as avoidance of further scams is concerned.
    And it looks like Morairaway & Co got clean away with it. A terrible shame because it was so easy for them and likely to happen again.
    Mike

  27. Andy says:

    @Mike
    That’s unfortunate. This is partly the crux of the whole problem. The international aspect. Even if the UK bring in legislation it won’t stop websites from appearing that are from outside the UK listing properties that UK citizens book via. What legislation will do is put additional burden on legitimate UK businesses and put them under undue strain and bureaucracy and stop them being able to compete due to increased costs.
    There may be a solutuon on the horizon. We are heavily involved with an organisation called ‘Profit’, I know the name isn’t ideal when we’re talking about villa scams but it stands for ‘Prevention of Fraud in Travel’. They were created some time ago by the big UK operators like Teletext holidays and others and, in the main, centred on traditional holidays, protecting the companies by sharing data for scam customers.
    We are in talks with them and some other large listing sites to open this up to UK private holiday villa sites to pool data on bogus properties and scammers and put in place minimum standards of checks to try and weed them out. This is by no means fool proof but it is a step in the right direction and I am sure, in time, we will develop this to plug the gaps and bring about a change in the industry.
    We are currently working on a ‘kite’ mark so all websites covered by this can display their membership to reassure customers they are at the forefront of fighting villa fraud.
    Additionally, VIPvillas.com have brought in experts in the data analysis field who work with the major banks and financial houses in the UK to check ALL owners on the site against a whole raft of databases held internationally to again reduce fraud attempts. This is cuting edge technology. On the other side we are just about to join ‘Guestscan’ so owners too can check customers against fraud databases to spot customers trying to book their properties when they have previously either not paid, took more guests than the villa can legitimately hold or caused wanton damage to a home.
    It’s all positive stuff and we’re doing our level best to cut out the scammers.