Morairaway.com travel scam: Holiday-Rentals pays out to victims

Dozens of British families duped into booking fake holiday villas in Spain are to receive some of their money back.

The decision by Holiday-Rentals.co.uk to pay 'compensation' for victims of the Morairaway.com swindle follows a series of articles from Timesonline on what appears to be the biggest-ever villa scam.

And the move also comes as news emerges that 72 Britons have been duped by a second villa scam, in Cyprus.

It is now known that a total of around 145 Britons paid an average £3,000 to Morairaway after spotting adverts on two of the biggest British villa rental sites, Holiday-Rentals and Holidaylettings.co.uk.

The Spanish-based website shut down and those behind it disappeared three weeks ago. Timesonline has been contacted by victims in 11 other countries across Europe and the overall scam is conservatively estimated to be worth in excess of £1m.

Holiday-Rentals, part of the HomeAway group, carried adverts for 48 of the fake villas for three months. Those customers who registered online for its rental guarantee scheme are covered up to £3,300. The cost of flights and care hire are not covered.

But while not legally liable, the company today introduced a blanket guarantee - and will retrospectively pay back 50 per cent of the booking value (up to £700) to customers who didn't sign up for the rental guarantee scheme.

The company denies it is in response to pressure from victims or Timesonline, or that is has a moral responsibility to reimburse those affected.

Spokeswoman Sarah Chambers said: "This does not affect our terms or conditions, or our business model; we remain a classified listings business and as such, the legitimacy of properties ultimately remains the responsibility of individual owners.

"However now all those who have booked on any HomeAway site worldwide, including those affected by Morairaway, will automatically be covered for up to 50 per cent (or a maximum of £700) for any deposits or rental fees they pay to advertisers on our sites.

"We will continue to offer increased coverage of up to £3,300 via our free Rental Guarantee to those who register before they pay."

The moves comes after a furious response from customers angry that the two lettings sites did not spot the fake adverts. Many are also angry that the Holiday-Rentals rental guarantee is not clearly enough displayed on its homepage - or that is automatic.

But, explained Chambers, the need to register is precisely because the company would have no way of knowing if somebody enquiring about a villa had actually gone on to book direct. "Unless they tell us if they booked and paid, we have no proof that any claim would be genuine."

Most ire is reserved however for Holidaylettings, which advertised 23 fake villas but which has no guarantee scheme - leaving the 42 victims who went on to book a fake villa with virtually no hope of redress.

It has also emerged that Holidaylettings has been taken in by a fraudster in Cyprus, who advertised three fake villas on the site. A total of 72 Britons went on to make bookings, paying between £300-£1,500.

But while Morairaway.com asked for payment 60 days before departure by money transfer or banker's draught, 90 per cent of victims in the Cyprus scam paid by PayPal - which has guaranteed refunds for complaints made within 45 days.

Travel experts are warning that fraudsters are targeting the industry in a year when travel has slumped and people are using the internet more than ever to find a deal.

Barry Gooch, chairman of the Prevention of Fraud in Travel (Profit) - a coalition of travel industry partners and police – said: “I don’t want to give the impression that the travel industry is careless,” he said. “But the problem is that this year – because it has been very tough – people are less guarded.”

A spokeswoman for Holidaylettings, Kate Stinchcombe, today claimed the company is now looking at a rental guarantee scheme but said it was unlikely to be in place for this summer. It is also considering travel insurance policies and is appoint a second fraud prevention staff member.

It also emerged today that one Holidaylettings customer has managed to obtain a refund from her bank, Barclays, despite it being three weeks after the money was transferred to Spain.

The company spokeswoman declined to give details but said the woman's victory was "down to persistence" with her bank. Many others are fighting for redress from their banks, saying they could have acted quicker to stop transfers.

It is a point of criticism also levelled at Holidaylettings, which removed the fake adverts from its site on June18 - but did not email customers with a warning until June 22. Holiday-Rentals informed customers on June 19.

Said Stinchcombe: "Our justification for not emailing people until the Monday was so that we were in the office able to respond to their reactions, which we wouldn't have been had we sent it on the Friday and they had tried to reach us over the weekend.

"It was imperative for us that we were able to help people as much as we could and as the morairaway people were uncontactable it was even more important that we were available to talk to."