Airbnb Arbitrage Scheme Exposed, Investors Seek Damages Amid Alleged Scam

Airbnb Arbitrage Scheme Exposed, Investors Seek Damages Amid Alleged Scam

Key Points:

  • Investors sued for damages against Airbnb’s arbitrage scheme, Hands-Free Automation (HFA).
  • HFA allegedly used deceptive practices, promising guaranteed returns through Airbnb listings at inflated prices.
  • Airbnb continuously emphasizes improving system accuracy in identifying and removing misleading listings.

Amid the dynamic landscape of short-term rentals and Airbnb, a scheme known as Hands-Free Automation (HFA) has been scrutinized, with investors seeking damages over alleged false promises and deceptive practices. The company, founded by Anthony Agyeman, reportedly engaged in Airbnb arbitrage, exploiting a method prohibited by Airbnb.

HFA claimed to possess “5-year exclusivity contracts” with property owners, allowing them to relist accommodations on Airbnb at higher rates for a guaranteed return on investment. Investors were enticed with promises of minimal risk and substantial profits within three to six months.

Investors, including Daryn Carr, wired significant sums to HFA, only to find their investments vanished, leaving them in financial distress. Carr, who invested $19,497, alleges that HFA falsely claimed relationships with property owners and violated Airbnb’s terms of service. Carr and 11 other investors filed a lawsuit that seeks at least $624,000 in damages.

HFA’s practices involved taking listings from hotel booking and short-term rental sites and reposting them on Airbnb at inflated prices, with claims of indirect permission from third-party sites. However, Airbnb expressly forbids such practices, stating that using third parties to book and list accommodations at inflated rates is not allowed.

Unaware of HFA, Airbnb affirmed that it continues to enhance systems to identify and remove misleading listings, having blocked over 216,000 suspicious listings as of September.

Despite investor frustrations and legal threats, HFA allegedly declined refunds, offering alternative arrangements like Amazon or Shopify storefronts. Agyeman, HFA’s founder, denied financial improprieties, while HFA’s attorney, Thomas Hunker, emphasized the company’s adherence to fiduciary obligations.

The lawsuit exposed challenges faced by investors, including verification issues and alleged forgery of documents by HFA. As Airbnb removed most, if not all, of HFA’s listings, the investors realized promised gains were not materializing. HFA continued its operations under a new entity, Wealthway, with similar promises of minimal risk and automation.

Airbnb disavowed any affiliation with Agyeman and HFA, noting the challenge of dealing with fraudsters exploiting the platform’s complexities. The saga underscores investors’ risks in unregulated spaces, prompting renewed calls for vigilant oversight and enhanced platform security measures.

TechGolly editorial team led by Al Mahmud Al Mamun. He worked as an Editor-in-Chief at a world-leading professional research Magazine. Rasel Hossain and Enamul Kabir are supporting as Managing Editor. Our team is intercorporate with technologists, researchers, and technology writers. We have substantial knowledge and background in Information Technology (IT), Artificial Intelligence (AI), and Embedded Technology.

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