Vacation cons take their toll

Brett Westphal almost skipped his annual pilgrimage to the Pro Bowl in Hawaii.

With average hotel room rates approaching $250 a night, he and his wife determined that a trip to Hawaii last January wasn’t in their budget. But they reconsidered after spotting a last-minute deal on Craigslist for a condo at the Waikiki Cabana for $80 a night, or $500 for the week.

Westphal, from Sacramento, Calif., checked online to see if the property actually existed and then wired about $580 to Texas, where the person listed on the advertisement claimed to live. The couple soon discovered the truth behind the adage: If a deal sounds too good to be true, it usually is.

"After arriving in Hawaii, we went to the condominium to pick up the key and the owners were a no-show," Westphal said. "At that point, I was freaking out … The sales office was closed so we had to get another hotel for the night. As it turned out, we had to get another hotel for the whole time."

The Westphals are just one of the hundreds if not thousands of visitors each year who come to Oahu thinking they have a reservation only to find the vacation rental that they booked online isn’t as advertised, doesn’t exist, or belongs to someone else, said Honolulu Police Department Lt. John McCarthy, who heads the financial crimes detail.

"Unfortunately, we see these scams all the time," he said. "Hawaii is a victim of its own popularity."

Here’s how it works: Scammers usually living outside of Hawaii will harvest pretty pictures from legitimate real estate ads and use them to craft fraudulent online ads. Hector Euredjian, owner of Discount Hotels Hawaii, which since 1995 has rented legitimate vacation rentals at competitive prices, said some ads are sophisticated and only can be detected because they are advertising ridiculous rates. Most of these ads are crafted using real Hawaii properties, but Euredjian also has seen pictures from an actual Paris condominium used to advertise a nonexistent one in Waikiki.

Often those that they have duped will arrive to find the unit already occupied by its actual renter or owner, McCarthy said. Some scammers even have stolen an owner’s identity, he said.

"We’ve had private homes where tourists have shown up and asked the owners, ‘What are you doing in my rental?’" McCarthy said. "Owners that are selling their homes are particularly vulnerable. We even had a policeman who had his home up for sale and the Realtors found it online being advertised as a rental."

Tim Caminos, spokesman for Hawaii’s Better Business Bureau, said 206 vacation and other similar rental scams were reported to the agency this year. "It’s pretty common. I know with certainty that we get lots of calls during the peak summer and holiday travel seasons," he said.

Barry Wallace, executive vice president of hospitality services for Outrigger Enterprises Group, said guests have tried to check in at properties that fall under the Hawaii Vacation Condos by Outrigger brand, only to find out they didn’t have reservations.

"These visitors are often very upset and we can’t help them because they didn’t book through Outrigger," Wallace said. "In other cases, their reservation exists, but there is no local property manager to contact if anything goes wrong. Our front desk gets blamed for all types of complaints and these units aren’t even in our rental program."

McCarthy estimates the average visitor who has been scammed will spend a day or more of precious vacation time trying to finding new accommodations, tracing their missteps and filing police reports. Also, they typically lose between $1,000 to $3,000, he said.

"However, I’ve seen tens of thousands lost. We’ve had several cases where people paid upfront to rent high-end places for six months. In one case, they lost about $60,000," McCarthy said.

Unfortunately, scammers also exact emotional tolls from their victims, who have saved up for a special vacation in Hawaii, said Jessica Lani Rich, executive director of the Visitor Aloha Society of Hawaii (VASH), a nonprofit that helps distressed visitors.

"We had one family rent a Kahala home for a reunion, but when they arrived they discovered their rental was nonexistent. Sixteen people from California to Sweden were affected by this. It really bothers me seeing how these visitors are hurt and violated," a teary-eyed Rich said.

Euredjian said visitors aren’t the only losers in this scenario — the unchecked spread of fraudulent online ads hurts legitimate owners and mars Hawaii’s reputation as a leisure paradise. In Hawaii, Euredjian said, he has seen legitimate owners "go belly up" because they’ve been sued after scammers committed fraud using their properties.

But Hawaii’s whole tourism economy shoulders the burden since any money that scammers take reduces visitor spending.

"Most people come here on a budget, so losing money cuts into their ability to participate in activities. Sometimes, they may stay three to five days instead of 10 days. We’ve seen a few cases where they had to go home immediately," Rich said.

Euredjian said the "guilt by association" aspect of the issue damages Hawaii’s tourism brand. "The people that are being scammed think that someone from Hawaii did it. We are all left holding the bag," said Euredjian, who posts warning ads on Craigslist and would like to see the city and state start ensuring that online advertising sites only post legitimate offerings.

"It’s a black eye for Hawaii tourism and nobody is doing anything."

McCarthy said police usually can’t resolve the crimes since they are perpetuated mostly by people outside of Hawaii and the money is exchanged in other jurisdictions. "Out of 100 cases, probably 99 are done by operators from out of the state or country," he said. "We usually don’t catch the scammers and we usually don’t investigate these cases unless a local person got scammed …"

For these reasons and more, Euredjian expects the problem could be growing even more than police and travelers aid reports indicate. "A few times a week, we encounter people trying to find alternative accommodations because they have been scammed," said Euredjian, who often works with Rich to find last-minute accommodations for victims. "But many don’t say anything. Some people get embarrassed. They’ve been had. They’ve been bilked."

VASH has received more frequent complaints in the past two years as the popularity of vacation rentals has grown amid Oahu’s tight lodging market.

In the case of the Westphals, police couldn’t do much since the crime occurred outside of Hawaii. Rich helped the couple secure a last-minute, discounted room. But the Westphals ended up spending another $2,000 for a trip they could barely afford.

"This happened during a very tough time in our lives when we were trying to have a brief diversion. My youngest son was fighting a brain tumor and starting chemo in the middle of all of this," Westphal said. "We got a very painful lesson."

If something isn’t done soon to help reduce the occurrence of these scams, Euredjian expects Hawaii tourism will feel the burn, too. "This is a huge problem," he said. "We’ve got to do more to stop it."