I was thinking about the sorts of fraud categories AirBnB likely experiences. Most fraudsters want cash or cash equivalents, and the use of lodging on a particular night is nearly as illiquid as stolen fine art. So, those seeking stuff to resell will choose to defraud one of the zillion online marketers who ship stuff to doorsteps. A buyer who actually used the space he reserved could initiate a chargeback later claiming that the service promised via AirBnB wasn't provided -- couldn't access apartment, wasn't as described, etc. However, space providers likely will cooperate with AirBnB and provide evidence in their defense. Better to attempt a chargeback elsewhere if one is short on money. It seems that using AirBnB as a platform for crimes between buyer and space provider is possible, and there certainly has been at least one heavily publicized case, but we would hear a lot more about these events if they were happening much.
So, what's left? Collusion between buyer and space provider -- in all likelihood, they are one in the same, or identities have been stolen. For example, I list my condo on AirBnB for $100/night. Someone books it for the weekend, and then doesn't show up. AirBnB owes me $200 -- after all, I gave up other options to profit from its use. An honest buyer pays up. But, maybe the buyer is dishonest -- he used a stolen credit card, etc. In this case, AirBnB eats the loss and pays me as the space provider. Now, wouldn't it be convenient if I was also the buyer? Cash from stolen credit cards, funneled through AirBnB (much akin to the way online poker sites were used to transfer stolen money via bad heads-up play). This would work until AirBnB noticed that my listing seems to have a suspicious propensity to attract fraudulent buyers. Then, they'll shut me down. So, I'll pop-up elsewhere. After all, no need to actually have a space because no one I accept will ever show up!
I bet the usage patterns of the party/parties involved in this fraud are drastically different than those of legitimate market participants. Someone with a fraudulent listing could out himself by rejecting a bunch of legitimate AirBnB buyers, and this behavior would stand-out as it's the opposite of the behavior expected of an honest seller. So, he must protect against this risk by making his listing unappealing (high price, bad photos/description, unpopular ___location, etc.). The behavior of users browsing AirBnB when viewing this property could identify its relative undesirability (few clicks, etc.), and price outliers could be identified by comparing similar offerings by date/___location/type. The click stream of the "buyer" likely is most revealing. Someone selecting an unappealing property without doing much comparison shopping likely isn't a legit buyer.
What other stuff might predict fraud? Vague descriptions might indicate a fraudulent listing. Most space providers love to tell buyers what's special about their offering. Could some scoring of a listing's prose prove a strong predictor? I've never listed with AirBnB. What do they do to verify listings? As a buyer, they verified my identity. Could this serve multiple purposes? Certainly, I'd feel better listing my guest room if I know that AirBnB will know the identity of the guy who rented the room and then stabbed me at 3AM. But, in addition, does identifying market participants in strong ways help keep fraudsters from repeating their crimes by setting up multiple accounts? Obviously, newer market participants are more risky than established ones, especially those who have interacted with known legit, long-time users. The social graph comes to the rescue here. Even astroturfing ought to show up as a small, disconnected graph unless legit users' identities are stolen.
Of course, this comment is all just conjecture. Obviously, AirBnB can't tell the public about specific fraud methods or how they identify suspicious activity. However, I like the concreteness of considering actual fraud scenarios, so I decided to put forth some ideas for discussion.
So, what's left? Collusion between buyer and space provider -- in all likelihood, they are one in the same, or identities have been stolen. For example, I list my condo on AirBnB for $100/night. Someone books it for the weekend, and then doesn't show up. AirBnB owes me $200 -- after all, I gave up other options to profit from its use. An honest buyer pays up. But, maybe the buyer is dishonest -- he used a stolen credit card, etc. In this case, AirBnB eats the loss and pays me as the space provider. Now, wouldn't it be convenient if I was also the buyer? Cash from stolen credit cards, funneled through AirBnB (much akin to the way online poker sites were used to transfer stolen money via bad heads-up play). This would work until AirBnB noticed that my listing seems to have a suspicious propensity to attract fraudulent buyers. Then, they'll shut me down. So, I'll pop-up elsewhere. After all, no need to actually have a space because no one I accept will ever show up!
I bet the usage patterns of the party/parties involved in this fraud are drastically different than those of legitimate market participants. Someone with a fraudulent listing could out himself by rejecting a bunch of legitimate AirBnB buyers, and this behavior would stand-out as it's the opposite of the behavior expected of an honest seller. So, he must protect against this risk by making his listing unappealing (high price, bad photos/description, unpopular ___location, etc.). The behavior of users browsing AirBnB when viewing this property could identify its relative undesirability (few clicks, etc.), and price outliers could be identified by comparing similar offerings by date/___location/type. The click stream of the "buyer" likely is most revealing. Someone selecting an unappealing property without doing much comparison shopping likely isn't a legit buyer.
What other stuff might predict fraud? Vague descriptions might indicate a fraudulent listing. Most space providers love to tell buyers what's special about their offering. Could some scoring of a listing's prose prove a strong predictor? I've never listed with AirBnB. What do they do to verify listings? As a buyer, they verified my identity. Could this serve multiple purposes? Certainly, I'd feel better listing my guest room if I know that AirBnB will know the identity of the guy who rented the room and then stabbed me at 3AM. But, in addition, does identifying market participants in strong ways help keep fraudsters from repeating their crimes by setting up multiple accounts? Obviously, newer market participants are more risky than established ones, especially those who have interacted with known legit, long-time users. The social graph comes to the rescue here. Even astroturfing ought to show up as a small, disconnected graph unless legit users' identities are stolen.
Of course, this comment is all just conjecture. Obviously, AirBnB can't tell the public about specific fraud methods or how they identify suspicious activity. However, I like the concreteness of considering actual fraud scenarios, so I decided to put forth some ideas for discussion.