FTC warns of risks for owners and renters using car sharing services: Internet Scambusters #1,040
Many of us are on the lookout for money-making side gigs, such as car sharing, where vehicle owners rent out their cars to other drivers.
It sounds simple on the face of it, especially as renters can use an app to hire your car for hours or days, with specialist companies taking care of the admin.
But a consumer watchdog and online reviewers are warning of big risks, including having your car used for crime, as we report in this week's issue.
Let's get started…
Dangers Of Car Sharing Rental Gigs
Car sharing, where you make money by renting out your own vehicle to other people, is the latest trend in what are called peer-to-peer (P2P) networks. But if you're thinking of signing up, beware! It's fraught with potential scams and other dangers.
Think of P2P as meaning "person-to-person." It was originally a computer term relating to sharing of digital files. Today, it embraces other activities such as taxi services like Uber and Lyft.
A couple of companies have already launched car sharing. Working with them, you can rent out your car by the hour or day, so it's a good way of making money as a side gig while your auto would otherwise be idle on the driveway.
Legitimate car sharing companies say they have legal and insurance protections and, as with Uber etc., they act as a clearing house for operators and manage the financial side via mobile apps.
The main attraction to renters is that fees are generally lower than using a regular car hire firm. In some cases, cars can also be rented on short notice.
However, the US Federal Trade Commission (FTC) has sounded an alert about the accompanying risks.
Consumer education specialist Kira Krown says: "Some people who've listed their cars have reported having them damaged, stolen, or used by someone to commit a crime. Even if the company has policies for dealing with these types of situations, they can take a lot of time and money to resolve."
The main risks the FTC has identified are:
- Publicly available information about your car and its location. When a person books it, they're told exactly where it's parked.
- If you choose to leave your keys in it for the renter, the car could be a target for thieves.
- Security features such as using a lockbox or using a remote unlock feature through an app are often dependent on their being within cell phone range. Or users may encounter other issues with them.
- Insurance can be complex and may not cover all risks. "Often companies' insurance will only cover active trips," says Krown, "so if your car is damaged or stolen between bookings -- even if you think it may have been targeted by someone on the app -- you could be on the hook for repairs."
One disgruntled owner reported on a Yelp review site: "Almost every customer I've rented my car to either damaged my car or had issues returning the car back to my possession."
One customer used the profile of a relative to rent her car, which was then totaled. Her insurance claim was denied and, she claimed, she received no compensation. Meanwhile, the driver allegedly faced no action.
And even when insurers do pay up for damage, there's often a deductible of several hundred dollars. Furthermore, some owners say that if the car breaks down and is abandoned, they're responsible for recovery, including towing charges.
On the other side of these deals, some renters have also complained of being stranded or ripped off by owners, with vehicles reported to be in poor condition, difficult to return to owners, and delays in getting refunds.
Another Yelp reviewer commented: "I have been trying to rent a car for a week. The owners of the car don't respond back to you. You call (the P2P firm's) customer service, and they tell you to call the owner."
The FTC has also warned about fake traditional car rental companies, taking advantage of the hot market for car hire.
It's a straightforward scam. Crooks promote their bogus firms, complete with websites offering low rental fees and bogus customer service numbers. The red flag is that they ask customers to prepay with gift cards or debit cards.
With both car sharing and rental firms, it's important to do your research, For example, the review quotes we've provided here turned up in a simple Google search on the name of a legitimate car sharing firm.
Whether you're an owner or renter, make sure you read the terms and conditions of hiring agreements. Often when you're booking a rental, you're in a hurry, but failing to take precautions can turn out to be very costly.
Check out the FTC's guide to car rental.
This Week's Scam Alerts
No Fake Candy: In the run-up to Halloween, you might have come across reports about crooks giving out the dangerous drug fentanyl disguised as candy to trick-or-treaters. You won't be surprised to know there hasn't been a single reported actual case of this happening. It was just the latest seasonal scare stories, joining others like reports of razor blades being hidden in candy wrappers. But that didn't stop thousands of people from reposting the claim on social media.
Not Sofia: Scammers are playing a fake fundraising trick in several places, pretending to be raising money for heart surgery for a child named Sofia. The Sofia Scam, as it's called, was recently spotted in Palm Beach, Florida, but local police said crooks are pulling the same trick across the nation. The scammers pose with posters pleading for donations but, said Palm Beach Police Department, it's a fake story.
That's it for today -- we hope you enjoy your week!