Airbnb Arbitrage Scheme Exposed: Investors Scammed Out of Thousands
In 2022, Daryn Carr stumbled upon an Instagram post promoting an opportunity to make easy money on Airbnb. The post outlined a method known as arbitrage, which involved relisting properties from hotel booking and short-term rental sites on Airbnb at a higher price. Carr decided to invest and paid Hands-Free Automation (HFA) between $20,000 and $30,000 to own a piece of Airbnb listings. However, Carr soon realized that he had been scammed, losing his investment and being left in debt. Carr is just one of many investors who fell victim to HFA’s fraudulent practices.
A Lucrative Opportunity Turns Sour
In 2022, Daryn Carr stumbled upon an Instagram post promoting an opportunity to make easy money on Airbnb. The post outlined a method known as arbitrage, which involved relisting properties from hotel booking and short-term rental sites on Airbnb at a higher price. Carr decided to invest and paid Hands-Free Automation (HFA) between $20,000 and $30,000 to own a piece of Airbnb listings. However, Carr soon realized that he had been scammed, losing his investment and being left in debt. Carr is just one of many investors who fell victim to HFA’s fraudulent practices.
False Promises and Prohibited Activities
HFA claimed to have “5-year exclusivity contracts” with thousands of property owners, allowing them to relist properties on Airbnb at an inflated price. Despite Airbnb’s strict policies against such activities, HFA found a way to make money on the platform. HFA’s co-founders, Anthony Agyeman and Megan Shears, had previously used similar tactics on Amazon and Shopify. However, the Federal Trade Commission and the Department of Justice have cracked down on companies like HFA, accusing them of false advertising and selling ineffective automated software.
The Inner Workings of HFA: Disgruntled Investors Speak Out
CNBC spoke to investors in a lawsuit filed against HFA, as well as former employees and individuals who had unknowingly stayed at an HFA-listed property. The lawsuit, which is ongoing, alleges that HFA made false claims about its relationships with property owners and violated Airbnb’s terms of service. Investors in the lawsuit are seeking at least $624,000 in damages. Despite the legal action against them, Agyeman and Shears have rebranded and continue to sell their services under a new company called Wealthway.
Airbnb’s Response and the Impact on Customers
Airbnb told CNBC that they were unaware of any contact from regulators regarding HFA, but they emphasized that business practices like Agyeman’s are not permitted on their platform. Airbnb continues to improve its systems to identify and remove fake listings, with over 216,000 suspicious listings already blocked. Customers who unknowingly booked HFA-listed properties have reported losing money and experiencing difficulties with their bookings. Complaints have ranged from properties being falsely advertised to nonexistent reservations.
The Unraveling of HFA’s Scheme
HFA’s operations relied on forging documents and circumventing Airbnb’s verification process. The company instructed investors to list their own homes and then add more properties that HFA would pull from other websites. This resulted in negative reviews, outraged investors, and property owners discovering their listings on Airbnb without their permission. Eventually, Airbnb removed most, if not all, of HFA’s listings. Investors who had paid thousands of dollars for the promised returns found that their investments were not materializing, leading to the filing of the lawsuit.
A Look at the Future: Agyeman’s Continued Activities
Despite the legal troubles surrounding HFA, Anthony Agyeman continues to promote his businesses on social media, including a new venture called OKU Capital. Agyeman’s new company, Wealthway, operates in a similar fashion to HFA, offering fully managed vacation rental businesses with minimal risk. Wealthway’s website even features a video purportedly showing a meeting between Agyeman and an Airbnb executive. However, Airbnb has stated that the video is inauthentic and that they have no affiliation with Wealthway.
Analyst comment
Negative news: Airbnb Arbitrage Scheme Exposed: Investors Scammed Out of Thousands
As an analyst, the exposure of the Airbnb arbitrage scheme and the fraudulent practices of HFA will have a negative impact on the market. Investors will be cautious and skeptical of similar opportunities, leading to decreased trust in platforms like Airbnb. Regulators will likely crack down on such schemes, resulting in stricter policies and increased scrutiny on listings. Customers may become more skeptical and hesitant to book properties, affecting the overall market demand for short-term rentals.
