Airbnb Lawsuit in New York Exposes Fake Listings Issue

Airbnb has a fake listings and verification problem — and the company knows it.

While Airbnb has verified many hosts in recent years, that doesn’t always mean its listings accurately represent the property the guest is trying to book.

Airbnb said in September that in late 2023 it would begin to verify every listing in its top five countries, namely the U.S., Canada, Australia, the UK, and France. Verified listings, backed by such things as exterior and interior photos that match the listing or videos with the host onsite, would appear with an icon starting in February 2024.

Airbnb removed around 59,000 fake listings in 2023, and blocked another 157,000 from ever appearing on the platform, the company said.

New York City Lawsuit Against Airbnb and a Tenant

The issue came to the fore in an ongoing New York court case, where a landlord sued Airbnb and a tenant for allegedly renting an apartment to guests as a short-term rental even though the building was registered with New York City as one that prohibits such use.

Airbnb acknowledges that it published two listings from a verified host, “Sarah.” As shown in court filings, one was for 27 Columbus Circle (seen immediately below), which the city’s Office of Special Enforcement confirmed was exempt from the Local Law 18 registration requirements.

However, Airbnb also published a second listing (see below) from “Sarah” with identical photos to the first listing, but it was for another address: 207 Columbus Drive, 10 blocks from Columbus Circle. And it was in a building that had signed onto the city’s list that prohibits short-term rentals.

In a court hearing in late November, an attorney for Airbnb, Dana Brusca of the law firm ZwillGen, said the host defrauded Airbnb by misrepresenting the listing’s address.

“Sarah” is not an Airbnb co-defendant in the lawsuit, which was brought by Columbus 69th LLC, which manages the 207 Columbus Avenue building. The co-defendant is Carmen De Dominguez, allegedly the tenant who may have listed and rented out the apartment in question.

‘Where Is the Tenant? Nobody Knows’

Airbnb attorney Brusca claimed Airbnb doesn’t really have a handle on who rented out the apartment. The tenant would have been in violation of her apartment lease, which bars using apartments for short-term rentals.

“Where is the tenant?,” the attorney for Airbnb asked in court. “Nobody knows. We don’t know if it’s Sarah, the host. We don’t know if it’s somebody else. The defendant in this case is Carmen De Dominguez. The host of Airbnb is Sarah, a third-party who may or may not be before this court in any respect.”

Dominguez actually lives in the Bronx, where she runs a business, WID Realty Corp., according to plaintiff attorney Michael Pensabene of the firm Rosenberg & Estis’ arguments in court. Dominguez is accused in a similar matter in another legal proceeding, he said.

Airbnb Removed the Offending Listing

Airbnb said it removed the 207 Columbus Avenue listing in early October when it became aware of the alleged fraud and fake listing.

But plaintiff attorney Pensabene isn’t buying the argument.

“At some point, Airbnb had to become aware of the actual address being 207 because it needs to connect the guest with the host, and Airbnb would not let that information go around it because then it would be cut out of the transaction and proceeds,” Pensabene told Skift Friday. “That argument does not seem credible.”

The Office of Special Enforcement’s verification system is geared to determine whether a host is registered with the city, or whether the property is exempt from registration requirements for reasons including being classified as a hotel. Airbnb claims it used that system to verify that 27 Columbus Circle was exempt from the registration requirement, but the host fraudulently rented out another apartment, 207 Columbus Avenue, which was prohibited from being used as a short-term rental.

Airbnb subsequently barred the host, “Sarah,” from doing business on Airbnb.

But attorney Pensabene argued in court that Airbnb didn’t do enough to prevent the flouting of New York City’s short-term rental laws.

“I would suggest to Your Honor that the obligation of Local Law 18 to verify the address [207 Columbus Avenue] would have required Airbnb to verify the same person Sarah who’s now coincidentally
advertising 27 Columbus Circle,” Pensabene said. “What, if anything, did they do to verify that address? What, if anything, did Airbnb do to police this same host Sarah from advertising?”

Airbnb didn’t comment to Skift about the New York lawsuit, Columbus 69th LLC against Carmen De Dominguez and Airbnb, but offered its plans on verifying listings starting late this year.

Are Fake Listings the Cost of Doing Business?

Airbnb announced in 2019 that it would seek to verify its listings, but Covid 19 seemingly delayed those plans until recently.

This issue, of course, is an industrywide problem, and not just Airbnb’s.

Carl Shepherd, HomeAway Co-Founder

HomeAway (now known as Vrbo) co-founder Carl Shepherd said fake listings has been a persistent problem. “Crooks only have to get one listing live,” Shepherd said. “Airbnb and Vrbo and Booking have to try to keep all fake listings out. It’s a continuing problem.”

Shepherd argued that most short-term rental companies see fake listings as part of the ecosystem.

“I think most of the online marketplaces look at it this way: If they protect the traveler from losses, then the occasional fake listing is just the cost of doing business,” Shepherd said. “But that does not help the traveler who shows up and finds that — oops — his is the host who slipped through the cracks and his trip is significantly harmed. He may get his money back, but the stress of finding another place is real.”

Merillee Karr, CEO UnderTheDoorMat Group

Marilee Karr, the chairperson of the UK Short Term Accommodation Association and CEO of UnderTheDoorMat Group, said if consumers want to avoid the risks of renting from an individual host, they should look to professional property managers, who can verify listings.

Karr backs third-party verification so hosts and companies can earn and display their legitimacy.

Referring to the New York court case, Karr said: “I suspect in this instance Airbnb lawyers are correct that the host did post fraudulent information. Ultimately these cases are rare (although very unpleasant, of course, for the guest) and that is why Airbnb and other booking platforms like Booking.com and Expedia are such a global success.”

Andrew McConnell, GM Revenue Management, TravelNet Solutions

Andrew McConnell, who general manager, revenue management for TravelNet Solutions, which provides tech solutions to property managers, said reading guest reviews for a property would be a hedge against listings that come up short of what was advertised.

“I don’t know how knowing or not it is from Airbnb’s side, but the more listings there are, the more they make,” McConnell said. “Hard to think they would invest as much in detecting ‘illegal listings’ as they would into increasing conversion.”

Simon Lehmann, CEO of AJL Atelier

Simon Lehmann, former chairman of Vacasa Europe and co-founder and CEO of AJL Atelier, a vacation rental consultancy, said “ensuring the accuracy and legitimacy of listings is essential.”

Said Lehmann: “Airbnb and similar platforms should take responsibility for the accuracy of the information on their platform. This includes conducting regular audits of listings and hosts to ensure compliance with their policies and local regulations.”