Preventing Scams in The Sharing Economy

Written by The Pasabi Team

26 January 2024

Peer-to-peer platforms have created an entire industry for people to make extra income from assets that would have never made them money before. Such as second-hand clothes on Vinted, a vacation home on Airbnb or their car on Uber. 

But the sharing economy can only exist when there’s a strong foundation of mutual trust between both sellers and buyers. Unfortunately, scammers abuse this trust for their own selfish gain. 

As a sharing economy platform, here are some of the common scams to look out for, and what you can do to stop them…

 

5 common scams on sharing economy platforms

How do you spot a scam? It helps when you know what to look for. 

 

Purchase bypassing

Most sharing economy marketplaces have protection policies in place for buyers and sellers. But they’re only valid if a customer completes the purchase within the platform. 

This is why many scammers try to convince your users to complete the purchase elsewhere. They promise tempting discounts, free shipping or a quick sale to gain their trust. 

“We tell people until we’re blue in the face to never go off our site and never wire people money.” commented Nick Shapiro from Airbnb in an interview with the LA Times. 

Outside the walls of your platform, buyers and sellers are susceptible to phishing scams. A scam artist might send them a payment link that mimics their online bank portal. Unable to tell the difference at first glance, they input their details and the scammer empties their account in minutes.

Preventing Scams in The Sharing Economy

 

Fake listings

Sharing economy platforms are particularly vulnerable to fake listings. And it’s because people aren’t expecting the same level of service or consistency from a peer, as they would from a business. Scammers know this. 

For example: If a property on Airbnb is also listed on Vrbo, but the owner has a different name, someone might think their partner uploaded the property on Vrbo instead. In reality, that listing is likely to be a scam. 

Other examples of fake listings could be:

  • Counterfeit goods
  • Products that don’t exist
  • Fake/misleading images and claims

Screenshot 2024-01-29 at 11.48.01

 

Fake reviews

Buying or renting anything on a sharing economy platform requires trust between two complete strangers. Reviews help to alleviate any of the concerns that users may have. Essentially acting as a form of social proof. 

Scammers use fake reviews to appear trustworthy. A scam seller could pay a fraudulent review broker to make false positive claims about their counterfeit products. Or a scam buyer could set up multiple accounts and write false reviews about their reliability to pay on time. In many cases, scam artists use fake reviews to bury negative feedback and mislead other users. 

→ Read our article on how to spot fake reviews on your platform. 

Preventing Scams in The Sharing Economy

 

Theft

Theft can happen on rental platforms (e.g. car rental, jewellery hire and vacation rentals). 

If a stranger came up to someone on the street and asked to borrow their car, they’d very likely say no. But many users feel comfortable renting their items in the sharing economy because platforms store identification and payment details. If anything goes wrong, the person can be traced, or the owner will at least be compensated. However, many scam artists find sneaky ways around this using fake accounts. When those details are fake, a scammer could drive away with a rented car, for it to never be seen by the owner again. 

Screenshot 2024-01-29 at 12.01.42

 

Identity fraud

To combat scams, many platforms ask for user ID verification. Today, users may need to provide official documents (e.g. passport), proof of address and selfie authentication before they can set up accounts on certain platforms. It’s certainly more secure, but not always foolproof. 

What happens when a scammer pairs AI-generated deep-fakes with camera injection technology to trick facial recognition? And how secure is ID verification when a scammer can create a fake identity? 

Bypassing the verification process altogether, scammers often perform account takeovers (ATOs) where they hack into existing accounts using login details they’ve purchased from the dark web. While ID verification is a more challenging barrier to entry, it’s not enough to eliminate all scam artists from your platform. 

Screenshot 2024-01-29 at 12.06.33

How to spot scams: 16 signals of scammers

  1. They ask other users to complete the purchase off-platform (e.g. on WhatsApp, Telegram, or via text).

  2. They promise a discount if buyers purchase from their website.

  3. They insist on money up front.

  4. They send ‘payment links’ to complete the purchase.

  5. The ‘payment link’ starts with ‘http’ not ‘https’ (‘https’ links are encrypted for user security).

  6. They create a sense of urgency in their messages (e.g. they need the money by the end of the day).

  7. They use identical images and descriptions as other listings on your platform (this could be a sign of a fake listing).

  8. They use doctored images (although, this is becoming harder to detect with AI image generators).

  9. Their IP address doesn’t match where they say they are.

  10. They have an usually high percentage of reviews for the number of items purchased from their store, and all of them are positive.

  11. They have multiple negative reviews from verified buyers.

  12. There are suspicious changes on a user’s account (e.g. a change of name or address that varies vastly from the original).

  13. There are multiple accounts paired with their IP address.

  14. Their prices are significantly discounted (e.g. 90% off).

  15. They have multiple listings, all at varying price points. 

  16. They pretend to be a representative from your platform. 

Want to protect your users from scams? Here’s how Pasabi can help.

Scammers are relentless in finding sophisticated ways to bypass your security measures. That's why continual monitoring is essential.

Pasabi's Trust & Safety Platform flags suspicious activity, such as fake reviews, fake accounts and counterfeit goods. 

With the help of AI, behavioural analytics and cluster technology, you can stay hot on the heels of scam artists and remove them from your platform before they get to your users. 

 

Trust is the lifeblood of the sharing economy 

Most people partake in the sharing economy because of the reputation of the platforms they use. In any other circumstances, would they get into a stranger’s car? Or stay in a stranger’s home? Probably not. They rely on platforms to bridge the gap between them and the other person (and provide some protection in the process). 

If platforms shirk responsibility, users won’t just become suspicious of that platform, they’ll become suspicious of the sharing economy as a whole. By neglecting user safety, these platforms could actively contribute in shrinking the very industry they work in. 

While platforms can’t control the actions of other people, they can control the measures they take to protect their users.

--> Want to stop scammers before they cause irreversible damage to your brand? Learn more about our scam detection solution